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Weak Consumption Hinders Economic Growth, Apindo Offers This Stimulus Suggestion

The Indonesian Employers Association (Apindo) has proposed an increase in the non-taxable income threshold, or PTKP, to boost consumer spending, particularly among the middle class. Bob Azam, the Head of Employment at Apindo, stated that the government’s initiative to cover the income tax under Article 21 for labor-intensive industries has not significantly stimulated growth, despite being a positive step. 'Any form of incentive is valuable, but it would be even better if we could raise the PTKP for the middle class,' Bob remarked to reporters on Sunday, May 11, 2025. He noted that increasing the PTKP threshold would alleviate the tax burden on the middle class.  

However, the Director of Administration and Corporate External Affairs at TMMIN did not specify the exact amount for the proposed increase. It is important to note that according to PMK Number 101/206 regarding PTKP adjustments, the current non-taxable income limit is set at IDR 54 million per year for single individuals without dependents, or IDR 4.5 million per month. 'Raising the PTKP effectively provides an incentive for the middle class,' he explained.  

He highlighted that consumer spending in the first quarter of 2025 has slowed down, even though tax incentives for labor-intensive sectors have already been implemented. This situation is partly due to weak household consumption, particularly from the purchasing power of the middle class. Additionally, government consumption has contracted by 1.38% year on year, according to BPS data. Most of the middle-class population does not qualify for social assistance, leading to restrained spending. Nevertheless, this group significantly contributes to consumption due to their substantial numbers and purchasing power. Therefore, Apindo urges the government to consider increasing the PTKP to provide greater consumption capacity for this demographic. Such an increase in consumption could also positively impact tax revenues, such as from VAT. 

Tag: Apindo Bob Azam BPS PTKP