Indonesia's Bold Tax Move Targets E-Commerce Giants

Indonesia plans to enforce new tax regulations on e-commerce platforms to boost revenue and level the playing field with physical stores. Concerns arise over increased administrative costs and potential seller pushback, as previous similar regulations faced withdrawal due to industry backlash.

Indonesia is gearing up to impose new tax regulations on e-commerce platforms, aiming to increase revenue collection and balance competition with traditional retailers. Sources familiar with the situation revealed that the policy could be disclosed as early as next month.

The announcement comes as the nation faces a dip in revenue collections, largely attributed to weak economic growth and disruptions in tax systems. The directive will impact leading e-commerce operators like TikTok Shop, Tokopedia, Shopee, Lazada, Blibli, and Bukalapak.

E-commerce platforms have voiced concerns about rising administrative costs and potential fleeing of sellers from online marketplaces. The finance ministry, responsible for issuing the directive, has yet to comment on the matter.

(With inputs from agencies.)