Indonesia Requires E-Commerce Platforms to Collect Seller Income Tax

Indonesia's Finance Ministry has implemented a new regulation requiring e-commerce platforms to collect and remit a 0.5% income tax on sellers with annual earnings exceeding 500 million rupiah, aiming to improve tax compliance among online merchants and create a level playing field with traditional businesses. The regulation, effective from July 14, 2025, affects major platforms such as TikTok Shop, Tokopedia, Shopee, Lazada, and Blibli, while exempting certain categories like courier services and phone credit vendors. Online merchants must report their sales invoices to the platforms, which then forward the data to the Tax Directorate General, with platforms given one month to comply. Maybank Investment Bank noted that the tax is expected to have minimal impact on e-commerce platforms and consumers, although segments like online accommodation rentals may face greater effects. The government anticipates tax revenues around 2.4 trillion rupiah from this measure, signaling a push for greater tax discipline among digital merchants. This move aligns Indonesia with other countries such as Mexico, India, and the Philippines that have implemented similar digital tax regulations.