Govt to Impose Tax on E-Commerce and Boarding House Businesses

 
Robert Sidauruk, Fathan Qorib
 
To achieve the 2015 state income target, the government is considering collecting value-added tax (VAT) from e-commerce and boarding house businesses. These businesses have becoming new emerging markets over the last couple of years with billions of rupiah in turnover.
 
Andi Hadiyanto, Acting Chief of the Fiscal Policy Agency at the Ministry of Finance, said that both businesses are operating in the domestic economy and therefore can be subject to local taxes.
 
“These are taxable sectors. Previously these businesses were insignificant but now they are turning into hotbeds,” said Mr. Hadiyanto, in Jakarta on Monday.
 
In regard to e-commerce, the government is currently formulating criteria for businesses that will be subject to VAT. Considering the level of money circulating through e-commerce businesses, Mr. Hadiyanto believes that the sector will make a positive contribution to achieving the state income target of IDR 1,484.6 trillion for 2015.
 
In relation to boarding house businesses, Mr. Hadiyanto contends that the basis for imposing VAT will not be an issue as the nature of the business is quite straightforward as a lease/rental service (jasa persewaan).
 
“VAT can be imposed on a boarding house business as it is considered a lease/rental service,” added Mr. Hadiyanto.
 
Don’t Chase Pennies
While appreciating efforts to achieve the state income target, Iskan Qolba Lubis, a member of the Budget Agency at the House of Representatives believes that VAT must only be imposed on specific targets. This can be done by setting clear criteria for businesses that will subject to VAT.
 
For instance, VAT can be imposed on apartments or boarding houses with an investment cost of up to IDR 1 billion. Mr. Lubis believes that imposing VAT on such businesses will complement the objective of achieving the state income target.
 
Similar to the e-commerce sector, Mr. Lubis reminded the government that many businesses classified as micro, small, and medium enterprises also operate their businesses in this sector and that the government should only impose VAT on big players in the e-commerce sector.
 
“Don’t chase pennies, there must be clear standards when imposing the tax,” added Mr. Lubis.
 
(hot/kc)
 
Robert Sidauruk, Fathan Qorib
 
To achieve the 2015 state income target, the government is considering collecting value-added tax (VAT) from e-commerce and boarding house businesses. These businesses have becoming new emerging markets over the last couple of years with billions of rupiah in turnover.
 
Andi Hadiyanto, Acting Chief of the Fiscal Policy Agency at the Ministry of Finance, said that both businesses are operating in the domestic economy and therefore can be subject to local taxes.
 
“These are taxable sectors. Previously these businesses were insignificant but now they are turning into hotbeds,” said Mr. Hadiyanto, in Jakarta on Monday.
 
In regard to e-commerce, the government is currently formulating criteria for businesses that will be subject to VAT. Considering the level of money circulating through e-commerce businesses, Mr. Hadiyanto believes that the sector will make a positive contribution to achieving the state income target of IDR 1,484.6 trillion for 2015.
 
In relation to boarding house businesses, Mr. Hadiyanto contends that the basis for imposing VAT will not be an issue as the nature of the business is quite straightforward as a lease/rental service (jasa persewaan).
 
“VAT can be imposed on a boarding house business as it is considered a lease/rental service,” added Mr. Hadiyanto.
 
Don’t Chase Pennies
While appreciating efforts to achieve the state income target, Iskan Qolba Lubis, a member of the Budget Agency at the House of Representatives believes that VAT must only be imposed on specific targets. This can be done by setting clear criteria for businesses that will subject to VAT.
 
For instance, VAT can be imposed on apartments or boarding houses with an investment cost of up to IDR 1 billion. Mr. Lubis believes that imposing VAT on such businesses will complement the objective of achieving the state income target.
 
Similar to the e-commerce sector, Mr. Lubis reminded the government that many businesses classified as micro, small, and medium enterprises also operate their businesses in this sector and that the government should only impose VAT on big players in the e-commerce sector.
 
“Don’t chase pennies, there must be clear standards when imposing the tax,” added Mr. Lubis.
 
(hot/kc)
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