Constitutional Court Maintains Tax on Pension and Severance Pay

Background of the Decision

The Constitutional Court (MK) has rejected a judicial review petition regarding the taxation of pension and severance pay ¹

. This decision, announced on Thursday (13/11/2025), relates to case Number 186/PUU-XXII/2024 concerning the material testing of the Income Tax Law. The law in question has undergone several amendments, with the latest being through Law Number 7 of 2021 regarding Harmonization of Tax Regulations.

Expert Analysis on Tax Fairness

Fajry Akbar, a tax expert from the Center for Indonesia Taxation Analysis (CITA), commented that the controversy surrounding the tax on severance and pension payments needs to be examined from the fundamental principle of tax fairness ¹

. Akbar's perspective emphasizes the importance of equity in the tax system, suggesting that the taxation of such payments should be evaluated for its implications on individuals receiving them.