Govt to Tax E-Commerce Businesses

TEMPO.CO, Jakarta – The Finance Ministry's Tax Directorate General will impose three types of trading taxes to e-commerce businesses, official says, citing that the government will not distinguish conventional trading businesses with e-commerce. "That's why, both segments should be equally aware to pay taxes in accordance to the law," said Wahju Tumakaka, director of business process transformation, during an e-commerce tax seminar yesterday.

The three types of taxes are income tax (PPh), value added tax (VAT) and sales tax on luxury goods (PPnBM).

Wahju said the Tax Directorate will work closely with other regulators to assess household e-commerce businesses. Home-based e-businesses that still do not have taxpayers' identification number (NPWP) will be required to register and apply for business permits. The government provides tax easing for companies with less than Rp4.8 billion annual turnovers, subjecting them to a tax levy of just one percent.

Indonesia has the highest-growing e-commerce sector in the world. Fetnayati, director of trade business development at the Trade Ministry, said Indonesia's e-commerce total market value now stands at US$8 billion. "The value is expected to increase by three times to US$24 billion," she said.

The rapid and massive growth creates a need for the government to impose regulations for online trading businesses. Fetnayati said the rules will provide business certainties, protecting merchants and consumers.

Pikukuh Tutuko, CEO of online payment provider Ipaymu, said the number of e-commerce SMEs will grow from 56,000 to 75,000 businesses. Through the Internet, these SMEs can increase their productivity by up to 29 percent. Despite the huge potential, he said, these businesses still have to go through tough challenges including low consumers' trust and logistics limitations.

FAIZ NASHRILLAH