Jakarta (VNA) – Indonesia began implementing a new tax collection mechanism for online marketplace sellers on July 1, requiring e-commerce platforms to withhold and remit income tax on behalf of merchants.
Indonesia's Directorate General of Taxes said technical preparations had been completed following weeks of coordination with major e-commerce platforms. The list of designated platforms authorised to collect taxes was expected to be announced soon.
Under the new rules, e-commerce platforms will withhold income tax under Article 22 at the point of each transaction, replacing the previous system in which sellers were responsible for calculating and paying their own taxes.
The government expects the shift to platform-based tax collection to strengthen tax administration, reduce revenue leakage and improve transparency in the country's fast-growing digital economy.
Finance Minister Purbaya Yudhi Sadewa said the policy does not introduce a new tax but merely changes the method of tax collection. He said the measure aims to create a more level playing field between online merchants and traditional retailers, which have long complied with tax obligations.
Indonesian authorities expect the new mechanism to modernise tax administration amid rapid growth in e-commerce while ensuring fairer competition across different business models in the digital economy./.
