Govt to Impose E-Commerce Tax?

Fitri Novia Heriani, Robert Sidauruk
 
Indonesia further progressed the development of its e-commerce regulatory regime when the House of Representatives passed its Bill on Trade (Bill) on 11 February 2014. While the main objective of the Bill is to protect consumers when conducting e-commerce, another contentious issue is how will the Government collect taxes from online businesses?
 
Gunadi, a tax professor at Universitas Indonesia, believes that tax collection on e-commerce transactions will be something that will be quite difficult for the Government to implement. This is in part due to the fact that e-commerce is closely related to and settled through payment systems that are managed by banks.
 
“It is quite difficult to impose tax when the activity involves a payment system,” said Mr. Gunadi in Jakarta last Thursday.
 
Mr. Gunadi further explained that the Government will need to make extra efforts if it wants to make banks collect tax from online businesses. Such an obligation, however, could be imposed under the Draft Bill on Banking currently being discussed by lawmakers.
 
Another option is to require sellers and merchants to collect tax from every e-commerce transaction undertaken. However, contends Gunadi, if such a requirement was imposed, the Government, in coordination with the Directorate General of Tax, would need give ample consideration to the likely reaction of online businesses.
 
“Instead of banks, the Government may impose the obligation to collect tax directly on sellers. However, such provisions must be balanced with some measures to incentivize sellers to collect the tax,” says Gunadi.
 
Meanwhile, Bayu Krishnamurti, Deputy Minister of Trade explained that the Bill provides certainty for both sellers and consumers in the e-commerce field. Bayu indicated that in the near future the Government will issue technical regulations to regulate electronic transactions in more detail.
 
“The main aim of the provisions is to protect the interests of parties involved in electronic transactions and provide guidance in performing e-commerce,” Mr. Krishnamurti said.
 
However, Mr. Krishnamurti refused to comment on the issue of an e-commerce tax under the Bill. The Deputy Minister said that this issue still requires further review as to whether or not the Government will impose such a tax.
 
“The Government has yet to regulate tax for e-commerce,” concluded Mr. Krishnamurti  
 
(hot/kc)