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View all search resultsMixed reaction as Purbaya delays e-commerce tax
The finance minister plans to postpone enforcing a withholding tax on e-commerce transactions, but not everyone is on board with that decision.
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Online marketplace and payment app icons are shown on a smartphone screen on Aug. 3, 2021. (JP/Norman Harsono)
F
inance Minister Purbaya Yudhi Sadewa has confirmed that the government will not yet impose a planned withholding tax on e-commerce transactions amid concerns about household spending, causing some resentment among traditional retailers.
“We will implement it once the economy has recovered. Maybe we’ve started to recover, but not completely. If the economy grows at 6 percent or more, then I will consider it,” Purbaya told reporters in Jakarta on Oct. 9.
His statement followed an announcement by the Directorate General of Taxes that the new levy would take effect in February 2026. Purbaya, however, clarified that no timeline had been set, stressing that the rollout would depend on stronger economic growth.
Issued in July, Finance Ministry Regulation (PMK) No. 37/2025 obliges online marketplaces operating in the country to withhold and remit a 0.5 percent income tax on sellers earning more than Rp 500 million (US$30,000) annually.
That would subject e-commerce sellers to the same turnover tax rate paid by formal brick and mortar retailers, including small enterprises. While both online and offline sellers are required to self-report their income, sellers on e-commerce platforms often fail to accurately do this, which is what the PMK aims to address with the withholding tax obligation.
The postponement of the policy has drawn mixed reactions from industry players and small business associations.
The Indonesian Shopping Center Tenants Association (Hippindo) said the postponement of the e-commerce tax was not conducive to “fair competition”, as it creates an uneven playing field between online sellers and offline retailers in malls, who already pay taxes both online and offline.
