VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Finance Minister Sri Mulyani Indrawati said Tuesday the government was only requiring internet companies to pay VAT on sales of digital products and services starting July 1, adding that the companies would only have to act as “tax collector” as consumers would have to pay for the taxes. (Antara/Rivan Awal Lingga)

The Indonesian government will press ahead with collecting digital tax despite a recent announcement by the United States Trade Representatives (USTR) to investigate such a policy, which the US said was aimed squarely at its technology giants.  Finance Minister Sri Mulyani Indrawati said Tuesday the government was only requiring internet companies to pay value-added tax (VAT) on sales of digital products and services starting July 1. The minister added that the companies would only have to act as “tax collector” as consumers would have to pay for the taxes. The government has been struggling to collect more revenues to fund its cash-strapped budget as the COVID-19 pandemic hits almost all business sectors. Law No. 2/2020 stipulates that the government is able to charge VAT on taxable intangible goods and/or services sold through e-commerce platforms and charge income tax or electronic transaction tax on e-commerce operated by foreign individuals or digital companies that have a significant economic presence. The significant economic presence will be determined through the companies’ gross circulated product, sales and/or active users in Indonesia. (Jakpost)