Patching Revenues Shortfall from Digital Platform Taxes

By Editorial Team 18/05/2020
Summary

Finance Minister Sri Mulyani Indrawati issued Ministerial Regulation No. 48/2020 as a legal basis for imposing a 10-percent Value Added Tax (VAT) on intangible goods and services by domestic consumers who purchase digital products. The minister, through the Director-General of Taxation, will appoint the e-commerce providers, which includes foreign goods/service providers, overseas providers, or domestic providers, to collect the VAT starting on July 1, 2020.

"The VAT imposition on the utilization of abroad digital products is part of the government's effort to create a level of playing field for all businesses, particularly between domestic and foreign players as well as conventional businesses and digital businesses," said the Director of Services Counseling and Public Relations for the Directorate General of Taxation Hestu Yoga Saksama in a press release, Saturday (5/16).

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