13December2017

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Implementation of E-Commerce Tax

The rise of online shopping activities today brings about blessing to digital economic actors. The promising financial turnover has encouraged the growth of new businesses around the world, including in Indonesia. In connection with the growth of the digital economy, the government of Indonesia will apply taxes to e-commerce entrepreneurs to boost the country's revenue from this sector.

 At a recent hearing with the House of the Representatives –DPR that was continued by a special meeting with the President, Minister of Finance, Sri Mulyani Indrawati said that her Ministry would soon issue a new tax regulation. One of them is about e-commerce tax which will be below the value-added tax rate -PPN or below 10%. In addition, Minister Sri Mulyani ensured that the regulation will also contain e-commerce tax payment procedures.

 Meanwhile, Executive Director of the Center for Indonesian Taxation Analysis, Yustinus Prastowo said that the government's plan to withdraw tax from e-commerce must be immediately realized. He views that there is a huge tax potential in e-commerce. According to Justin, to fairly impose tax in e-commerce, Indonesia needs to learn from the European Union -EU that has implemented the original principle for value added tax.

 However, e-commerce entrepreneurs ask the government, especially the Directorate General of Taxes not to add more tax burden. CEO of Bhinneka.com, Hendril Tio who is also Chairman of the Association of E-Commerce Indonesia said that so far, e-commerce players have paid value-added tax -PPN and income tax -PPH as the offline stores have done. However, he added that basically, all e-commerce industry players are ready to pay taxes based on available regulations. Hendrik Tio also remarked that the government should also be fair to impose tax for The Top-OTT belonging to foreigners, because their platform also sells, such as Facebook and Twitter.

 It is fine for the government to impose taxes to anyone conducting economic business in Indonesia. Because this is related to the on-going transaction. The government is intensively striving for other tax sources to increase the state's revenue. Since it’s connected with the development of Indonesia, especially infrastructure development that requires substantial funds. In today's modern era, almost all aspects of activities require a fast, secure, easy and efficient way through all digital transactions. The rise of online trading has become a profitable option for entrepreneurs. Therefore, it is reasonable for the government to impose the e-commerce tax. But in a bid to maximize revenue from e-commerce, one integrated service is required in the withdrawal of value-added tax in every digital transaction.

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