JAKARTA: Indonesia has an open ear for companies debating a planned e-commerce tax, but a tough fist for those that defy the levy, a government spokesman said.
Tax Directorate spokesman Hestu Yoga Saksama said the office will announce the online tax by mid-2017, pushing the government deeper into a growing but unruly section of the internet where the likes of Alibaba, Lazada, and eBay have been doing business for years. Indonesia is gathering input from several ministries, he said, as well as from industry players.
“We will make them comply, because the regulation also [will] have some penalties for those who [do] not comply,” Saksama said.
Tax authorities are mulling ways to cut a slice of Indonesia’s $1.7 billion e-commerce pie, which will swell to $46 billion by 2025, according to a May 2016 report from Google and Temasek, Singapore’s sovereign wealth fund. No other Southeast Asian country comes close, with the next-biggest market for online sales, Thailand, expected to reach $11.1 billion by 2025.
Saksama said when officials adopt a rate, they’ll take into account corporate income and value-added taxes, which are 25 percent and 10 percent, respectively.
“Unfortunately, we’re not sure on numbers yet, but most important is that we can tax them [companies] effectively and efficiently,” he added.
