Online retailers in Indonesia to face new tax rule
JAKARTA - Online retailers should brace themselves as the government is preparing to launch a tax regulation this year after keeping such a regulation in limbo for several years.
“There is a plan to release a special economic package on e-commerce,” said Indonesian E-commerce Association chairman Daniel Tumiwa on the side-lines of an open house at Communications and Information Minister Rudiantara’s official residence in Jakarta on Wednesday.
“So, SMEs (small and medium-sized enterprises) that run their businesses online will be charged a small percentage of tax by the government.”
The association had recently met with the Taxation Directorate-General. The tax rate to be charged was “reasonable”, smaller than the rate currently charged on offline SMEs.
Back in 2013, the Finance Ministry issued a regulation that set 1 per cent in income tax on individual and institutional taxpayers with annual business turnovers of up to 4.8 billion rupiah (Bt12.8 million). However, the government has found it difficult to charge small online players, most of whom don’t have legal entities or taxpayer identification numbers.
With the upcoming regulation, people owning online shops, including on Instagram or Facebook, must report their incomes and pay taxes, he said.