Wednesday, 19 February 2020

Sri Mulyani: Omnibus Law Will Tax Netflix, E-commerce

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Laila Afifa

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  • Finance Minister Sri Mulyani. TEMPO/Tony Hartawan

    Finance Minister Sri Mulyani. TEMPO/Tony Hartawan

    TEMPO.CO, Jakarta - Finance Minister Sri Mulyani has announced that taxes of digital sectors such as Netflix up to e-commerce will be regulated in the omnibus law on taxation. As of date, the government has not issued a legal umbrella for such businesses.

    "The [omnibus] law will rule the operation of companies such as Netflix and e-commerce because we need stronger regulations," said Sri at Ritz Carlton Hotel, Wednesday, January 29.

    In addition to the digital tax, the omnibus law on taxation will address a variety of things, including the reduction of corporate income tax rates from 25 percent to 22 percent and up to 20 percent in 2023.

    The rule will also include a relaxation of 3 percent corporate income tax for public entities. The government also planned to eliminate dividend tax and adjust the Income Tax (PPh) 26 tariff. "We will also apply a territorial tax system, which means we are not taxing income from outside Indonesia," Sri added.

    The former managing director of the World Bank went on to say that the omnibus law would ease the licensing process and requirements of various investments, as well as provide protection for micro, small, medium enterprises (MSMEs).

    The drafts bill will soon be submitted to the House of Representatives (DPR) along with other Law bills, namely the job creation and the new state capital city. The omnibus law drafts on taxation and job creation will contain 11 packages. "All will include regulatory instruments to improve our economic environment," Sri Mulyani concluded.

    FRANCISCA CHRISTY ROSANA