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The Communications and Informatics Ministry said that it has not come up with the best solution in relation to the endeavor of collecting taxes from giant tech company Google, as the regulation on foreign app companies (over the top or OTT) has not been realized yet.
“No solution yet, and I’m still coordinating with the Finance Ministry. But I keep on pushing to have a playing field level between the national OTT and the International OTT,” Communications and Informatics Minister Rudiantara said in Jakarta on Friday, October 7, 2016.
Earlier, Rudiantara said that Google Indonesia was not running an advertising business. In addition, Google has not set up a permanent local entity (BUT) in Indonesia, making it difficult for the government to collect taxes from Google.
Rudiantara called on Google to show its good will to discuss the issue.
“However, the amount of taxes to be paid by Google remains Finance Ministry’s jurisdiction,” he said.
Rudiantara had also set a target to finalize regulations on OTT companies in the third quarter of 2016. However, the realization remains sluggish since the Ministry cannot issue a regulation that is not applicable and enforceable.
Google Singapore, as Google Indonesia’s holding company, refused to be audited by the Tax Directorate General, following a finding that Google gains income from Indonesia, although it has not yet established a permanent local entity in the country. The Tax DG found an indication of criminal offenses and conducted investigation into the company.
Finance Minister Sri Mulyani has not provided details about steps to be taken to collect taxes from Google. However, Sri said that the government would continue to demand Google to fulfill its tax obligations.
