JAKARTA: Indonesia’s government has tightened its tax collection policy on high-technology enterprises in the country, starting with the US-based technology giant Google, as the companies have not paid enough to the government despite their expansion.
Last week, the country reached a tax settlement with Google for 2016, following a month-long block over allegations that the firm had not made enough annual payments, said Minister of Finance Sri Mulyani Indrawati.
Minister of Information and Communications Rudiantara affirmed that Alphabet Inc, under Google Asia Pacific agreed on future tax payments, adding that the tax deal might change regulations for online advertising business in the country.
The ministry will work with Indonesia’s investment coordinating board on the regulations, he added.
Previously, in last September, the Southeast Asian country asked Google to pay five years of back taxes, including the 2015 amount of more than 400 million USD. However, the company showed proof that its revenue was far from the estimates made by the Indonesian tax authority.
Last year, Google also agreed to pay 130 million pounds (166 million USD) in back taxes to the UK government.
Recently, on June 27, the European Union’s antitrust agency asked Google to pay a fine of 2.42 billion Euros (2.7 billion USD) for abusing its dominance as a search engine by giving an illegal advantage to its own comparison shopping service. However, the company rejects the decision and is considering lodging an appeal.
