Indonesia’s Ministry of Finance has introduced a regulation requiring eCommerce platforms to collect income tax from sellers, as part of efforts to enhance tax compliance among online merchants.
Effective from 14 July, the new directive mandates online marketplaces operating in the country to withhold and remit a 0.5 per cent income tax on sellers with annual earnings exceeding 500 million rupiah.
Prominent platforms affected by the regulation include TikTok Shop and Tokopedia, both under China’s ByteDance, Shopee owned by Singapore’s Sea Ltd, Lazada of Alibaba Group, and Blibli operated by Global Digital Niaga, a subsidiary of Indonesia’s Djarum Group.
The regulation exempts specific categories of sellers such as courier services, mobile credit vendors and jewellery traders. Under the framework, online merchants are obliged to submit their sales invoice details to their respective eCommerce platforms, which will relay the information to Indonesia’s Tax Directorate General.
Although the rule took immediate effect, eCommerce operators have been granted a one-month grace period to achieve full compliance.
Rosmauli, spokesperson for the Tax Directorate General, noted that the regulation was implemented in response to a significant surge in online marketplace transactions across Indonesia. This trend, she highlighted, was accelerated by the Covid-19 pandemic and further supported by widespread smartphone adoption, rising Internet penetration and innovations in financial technology that have simplified online transactions.
“Therefore, regulation that simplifies tax administration is necessary, particularly for businesses transacting via electronic systems,” Rosmauli said on Monday, as reported by Antara.
She emphasised that the initiative also seeks to establish a level playing field between digital and traditional businesses. Similar measures have already been adopted in countries such as Mexico, India, the Philippines and Turkiye.
-The Jakarta Post
