Economy Slows Down, Target for Income Tax 21 in 2026 is Lowered

JAKARTA - Minister of Finance Purbaya Yudhi Sadewa revealed the reason why the government set the target for income tax receipts (PPh) Article 21 in 2026 lower than the previous year.

For information, the target income of Income Tax Article 21 in 2026 is set at IDR 251.19 trillion or decreased from the 2025 target which reached IDR 313.51 trillion.

According to Purbaya, the reduction in the target was influenced by the national economic conditions which were slowing down.

"Tax follows the economy. If the economy slows down, taxes will slow down," he told the media, Thursday, January 22.

He explained that the weakness of economic activity has a direct impact on employee income tax deposits, so this also reflects the government's limitations in optimizing the collection of tax revenue.

"The tax collection to GDP ratio is relatively constant. Except that we improve the efficiency of collection and we promote the right people. That is why this year we encourage the economy to grow faster," he said.

Purbaya said the government would continue to strive to increase the revenue achievement to exceed the target through policies that support economic growth of up to 6 percent.