TEMPO.CO, Buenos Aires - The Indonesian government is fighting for its rights as a developing country to get fair taxes from global digital companies such as Facebook, Google, Twitter, Amazon, Lazada, Uber, and Grab. Finance Minister Sri Mulyani Indrawati touched on the issue in a meeting of G-20 countries in Argentina.
Sri Mulyani said taxation could be done in the context that tax sources and tax liabilities were determined by significant economic presence, as opposed to the location of a company’s headquarters or its branches.
Sri Mulyani said Indonesia would continue to fight for its rights for fair and effective tax revenue through international cooperation.
“[This is] to face the efforts of tax evasion by both individuals and companies," she said as quoted from her Facebook's status on Wednesday, March 20. Taxes, according to Sri Mulyani, are a valuable source of development for a country.
Sri Mulyani said Indonesia had also voice supports towards the provision of technical and legal assistance for small and developing countries so they could afford their rights of fair tax revenue.
Sri Mulyani also touched on international taxation cooperation. She said after the progress achieved in the Automatic Exchange of Information (AEOI) approval in taxation, the current cooperation focused on tax and tax transparency for digital economy.
Sri Mulyani hoped the OECD could come up with a common approach that could be done collectively to embark on the digital economy era.
She said all countries were dealing with the same issue: the already happening and increasing digitalization of the economy that yielded benefits in the form of increased productivity and efficiency.
Sri Mulyani also explained that base-erosion and the complexity of tax determination—where added value occurs—still posed a threat to taxation. She said there were still dissenting opinions on the sources of main added values: whether they were from consumers and their data sources or from the algorithm system that provided platforms from digitalization and e-commerce activities.
She added unfair competition between digital and conventional corporations also took place in terms of taxation. “All finance ministers in the world are grappling with hard pressures, both technically and politically, on fair and effective taxation on the digital economy and e-commerce, Sri Mulyani said.