Indonesian Finance Ministry mulls plans to tax e-commerce sites
In this article (5)
The Indonesian Finance Ministry is considering plans to tighten tax regulations on transactions of foreign-owned online businesses that have yet to set up a local presence, in another strategy to generate more revenue to the state coffers.
Deputy Finance Minister Mardiasmo said that the ministry is also looking to collaborate with the Ministry of Information and Communication in tracking online transactions through foreign-owned companies, such as Apple’s iTunes store.
An attempt to tax online transactions from the companies that are based overseas could mean that these companies would be obliged to set up a locally incorporated company in Indonesia – which has become a burgeoning market for tech giants such as Google and Facebook.
Questions & Answers
Q.What is the main goal of the Indonesian Finance Ministry's proposed tax changes?
What is the main goal of the Indonesian Finance Ministry's proposed tax changes?
The primary goal is to generate more revenue for the state coffers by tightening tax regulations on foreign-owned online businesses operating without a local presence.
Q.Which specific types of online businesses are targeted by these new tax plans?
Which specific types of online businesses are targeted by these new tax plans?
The plans target foreign-owned online businesses that currently do not have a local presence in Indonesia, such as Apple's iTunes store.
Q.What potential consequence might these foreign-owned companies face if the new tax regulations are implemented?
What potential consequence might these foreign-owned companies face if the new tax regulations are implemented?
These companies might be obliged to establish a locally incorporated company in Indonesia if the proposed tax on online transactions from overseas-based firms is introduced.
Q.Which other government body is the Finance Ministry collaborating with on this initiative?
Which other government body is the Finance Ministry collaborating with on this initiative?
The Finance Ministry is looking to collaborate with the Ministry of Information and Communication to help track online transactions made through foreign-owned companies.
Reader pulse
Will this tax plan work?
23,169 votes so far