2026 fiscal year marks the first full year in which the Minister of Finance, who took office in September 2025, will implement tax policies for the entire year. He clearly stated that no new taxes will be introduced or tax rates increased in 2026, even though the tax revenue target is set at IDR 2,357.7 trillion, an increase of 7.69% from IDR 2,189.3 trillion in 2025. He indicated that tax rates will only be considered for adjustment after economic growth consistently exceeds 5%, ideally reaching 6%, and after a significant improvement in public purchasing power.
Regarding Value Added Tax (PPN), there are currently no plans for adjustment, unless economic growth exceeds 6%, then the government may have room to evaluate increases or decreases. Previously, there were rumors of an increase at the end of 2024, but in early 2025 only luxury goods were subject to a 12% tax rate; in terms of tax administration optimization, the Ministry of Finance will rely on the Coretax system to improve administrative efficiency and compliance. This system has been in use since early 2025, centralizing tax payment services, supervision, and collection. Starting in 2026, all taxpayers must submit their annual tax returns (SPT) through Coretax, covering the 2025 tax returns for individuals and companies.
The Global Minimum Tax (GMT) will be fully implemented in 2026. According to the Minister of Finance regulation, a top-up tax will be imposed on multinational enterprises with consolidated total revenue ≥ EUR 750 million and an effective tax rate below 15% in the operating jurisdiction. The calculation mechanisms include the Income Inclusion Rule (IIR), Qualified Domestic Minimum Top-up Tax (QDMTT), and Undertaxed Payment Rule (UTPR). In 2025, the IIR and QDMTT have been piloted and prepared, while in 2026 the UTPR will be implemented and top-up tax for the 2025 tax year will be collected (no later than December 31, 2026).
The scope of Automatic Exchange of Financial Account Information (AEOI) will be expanded in 2026, covering specific electronic money products and central bank digital currency, while preventing duplicate reporting under the CRS and the Crypto-Asset Reporting Framework (CARF). This is to comply with OECD-related international agreements on digital currencies and crypto-asset standards, requiring financial institutions to improve account identification, exemption categories, and reporting information; regarding e-commerce withholding tax, the 0.5% income tax (PPh 22) on e-commerce platform merchants originally scheduled for 2025 has been postponed until economic growth reaches 6%.
Personal income tax incentives extended to 2026: Employees with wages not exceeding IDR 10 million in labor-intensive industries and tourism sectors can enjoy PPh 21 borne by the government (DTP) benefit. In 2026, it is expected to benefit 2.22 million workers with a budget of IDR 1.28 trillion (of which 1.7 million workers in labor-intensive industries with a budget of IDR 800 billion; 552,000 in hotels and restaurants with a budget of IDR 480 billion); the VAT exemption for house purchases is extended until the end of 2027: 100% PPN borne by the government for residential homes (including apartments), benefiting approximately 40,000 units annually, aiming to maintain purchasing power and stimulate the economy; the Tax Holiday model is adjusted: it will continue, but due to the GMT requirement of a minimum 15% corporate income tax, the new model will no longer be a full exemption of the 22% rate, but instead will provide alternative incentives based on 15%, to avoid subsidizing other countries' treasuries. A new PMK is being drafted.