Sri Mulyani Set to Tax Netflix

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati said that the government was still struggling to collect taxes from digital companies, such as Netflix. The reason, she added, those firms did not have a permanent establishment (PE) yet.

Sri reiterated that without the PE, the tax collection was hampered by the law. “So, we will propose a concept of the digital economy on the law,” said the minister at Borobudur Hotel, Jakarta, Tuesday, October 29.

According to Sri, albeit those companies did not have a fixed place of business in the country, they had economic significance, and so they were required to pay tax in Indonesia.

“Australia and Singapore had set tax for Netflix called Netflix Tax,” she added.

Therefore, Sri was determined to prep the plan on the tax collection thoroughly.

“Even though there was no policy on the matter, we are seeking ways to obtain our taxation rights,” Sri underlined.

Previously, Sri Mulyani claimed all countries were facing difficulties to tax digital companies such as Google, Facebook, Amazon, and Netflix. The issue was brought up by G-20 countries during a recent meeting in Japan.

“Not only us [Indonesia], the whole world is perplexed to tax Google, Facebook, Amazon, Netflix because their companies are not in the country, yet they earn effective revenue,” said Sri Mulyani during a budget board meeting at the Parliament Complex, Jakarta, June 11.

HENDARTYO HANGGI | FRANCISCA CHRISTY ROSANA