Tax Officials Set Eyes on Facebook

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  • TEMPO.CO, Jakarta - The Finance Minister's Directorate General of Tax has planned that it would collect taxes from Facebook as the over the top (OTT) company continues to generate profits in Indonesia.

    "We will invite Facebook from Ireland," Muhammad Haniv, head of the Tax DG's Jakarta Regional Office said on Wednesday, November 23, 2016.

    According to Haniv, Facebook's data center is located in Ireland. Haniv revealed that the meeting has been scheduled at the end of this year. Haniv added that Facebook has responded to a letter sent by the Tax DG.

    According to Haniv, Facebook viewed that the company has tax obligations to Indonesia, since it does not open a representative office in the country.

    "But if you open Facebook, it's really fast here. It means that it has a server in this country, and it is taxable," Haniv added. 

    Haniv hopes that the Finance Minister would soon finalize the bill governing OTTs.

    "Tax authorities across the globe are having headaches in facing Google, Facebook, and others," Haniv said. 

    Haniv revealed that Facebook has generated US$160 million worth of profit. Of US$840 million of profits generated by OTT companies in Indonesia, 70 percent belongs to Google and Facebook.

    Haniv pointed out that the Communication and Information Ministry is expected to be involved in collecting taxes from OTTs, as it has data on internet speed, frequency, and usage. He suggested the Ministry to regulate OTTs' servers.

    In addition to Facebook, the Tax DG is also targeting other tech giant companies, such as Apple, Twitter, and Yahoo.


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