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Jack Ellis · · 1 min readIn brief: Indonesia introduces new rules to ensure ecommerce sellers pay taxes
Indonesia is bringing in new rules, requiring ecommerce sellers to share data with authorities, while also stressing that they must pay taxes, the finance ministry said.
Spending in the Indonesian ecommerce market is projected by consultancy firm McKinsey to rise from US$8 billion last year to as much as US$65 billion by 2022 – similar to the growth trajectory experienced in China between 2010 and 2015 – and the government is trying to squeeze more from a market that traditional retailers have alleged avoids taxes.
Source: Reuters
The finance ministry’s new rules – which are due to come into force in April – require ecommerce marketplaces to tell the authorities how much money is made by each vendor that sells through their sites.
Sellers with revenue of at least 4.8 billion rupiah (US$341,000) are required to charge value-added tax to buyers. Additionally, small or medium-sized businesses must pay 0.5 percent of revenue as income tax, while larger enterprises must pay the corporate tax rate of 25 percent on profit.
Indonesia’s Ecommerce Association said that the new rules would drive online sellers to sell through social media platforms in an effort to avoid tax.
Ecommerce unicorns Bukalapak and Tokopedia said they are studying the possible impact of the rules on their businesses.
Currency converted from Indonesian rupiah: US$1 = IDR 14,079
Editing by Charmaine de Lazo
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