TheJakartaPost
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E-commerce and cross-border tax avoidance
The main question is: How can products and services be taxed if they are purchased from foreign e-commerce websites?
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Ecommerce platform Amazon (Shutterstock/File)
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n Indonesia, there is an enormous potential for growth in the e-commerce sector. According to the Indonesian Internet Service Providers Association (APJII), the number of internet users in 2017 totaled 143.26 million, about a half of which (49.52 percent) were in the productive age (19 to 34 years old).
Global management consulting firm Bain & Company has reported a similar finding, revealing a 74 percent increase in digital consumers between 2016 and 2017. In its report, the company stated that Indonesia had 83 million digital consumers, making it the highest number of digital consumers among all Southeast Asian countries.
The findings certainly encourage market players to develop the e-commerce sector, despite that in 2016 e-commerce only contributed 0.71 percent to Indonesia’s gross domestic product.
A survey conducted by Google and Temasek, for instance, predicted that in 2025 the value of Indonesia’s market would be US$46 billion, approximately 52 percent of Southeast Asia’s e-commerce sector, which is worth $87.8 billion.
