Article 22 Income Tax for E-Commerce Begins Implementation; idEA: Impact on Prices Uncertain
The Indonesian E-Commerce Association (idEA) has stated that the impact of implementing Article 22 Income Tax (PPh Pasal 22) on transactions via electronic systems cannot be seen in the near future. The association estimates that it will take approximately three weeks to one month to observe the impact of this policy on transactions and goods prices on e-commerce platforms.
Budi Primawan, Chairman of idEA, explained that the Article 22 collection mechanism is based on transaction value. A tax of 0.5 per cent is imposed on transactions made by traders who have met the gross turnover threshold set by the government.
“So, from the transactions paid, once it reaches a certain amount, 0.5 per cent of the price will be charged. Regardless of the price, it is per transaction,” said Budi on Friday (10/2/2026).
He provided an example where if a consumer makes a transaction worth Rp100,000, the tax collected reaches 0.5 per cent of that transaction value, and the same applies to a transaction of Rp1 million.
However, according to Budi, there is insufficient data to conclude whether this policy will directly impact price increases for goods on e-commerce. “Looking at it, small items might not increase in price. For larger items, we might only be able to see the impact in a month,” he said.
Budi noted that the impact on consumers ultimately depends on the decision of individual sellers. Sellers may choose to absorb the tax burden themselves or incorporate it into the selling price of the goods.
“If sellers raise prices due to the tax, we do not know. Because prices within e-commerce are purely the right of the seller to determine,” he said.
According to B-udi, e-commerce platforms do not automatically determine the prices of goods sold by merchants. Sellers have the authority to determine the price of their respective products.
He also emphasised that the Gross Merchandise Value (GMV) recorded in e-commerce transactions is not the same as the revenue received by the platform. GMV represents the total value of all goods transactions occurring on the platform.
“The GMV figure is the transaction value of goods in e-commerce, not what is earned by the platform,” he added.
Budi explained that one of the challenges in implementing Article 22 Income Tax is determining whether a trader has met the turnover threshold that serves as the basis for tax collection.
In his view, traders need to provide a statement regarding whether their turnover has reached the specified limit. Meanwhile, transaction data from various platforms will become part of the tax administration process.
Budi noted that a trader might operate stores on several platforms simultaneously. For instance, a trader might not reach the turnover threshold on one marketplace, but may reach it once all transactions from various sales channels are calculated.
“For example, on Lazada, they might not reach Rp100 million, on Tokopedia they reach Rp500 million, but on Shopee they might reach the limit. That will be accumulated,” he said.
In addition to marketplaces, traders may also conduct sales through social media, WhatsApp, physical stores, or activities such as bazaars. Therefore, the turnover threshold is not solely determined by transactions on a single e-commerce platform.
Budi stated that the Directorate General of Taxes (DJP) has provided explanations to industry players that marketplaces may use a statement letter from traders as the basis for determining whether a trader’s transactions need to be taxed.
“Simply accept the letter; whether they must be deducted or not, that letter serves as the proof. Subsequently, the DJP will follow up,” he said.
On the other hand, Budi mentioned there are plans to provide facilities or incentives for micro and small enterprises, as well as traders selling Indonesian products. However, the provisions regarding these facilities are not yet fully in effect.
He noted that a Ministerial Decree and further discussions between the government and e-commerce platforms regarding the implementation mechanism are still required. “Those exempt from fees are micro and small businesses. Secondly, those selling 100 per cent Indonesian products,” said Budi.
According to him, the implementation of these provisions is not simple because marketplaces have different systems and data characteristics. The government and platforms still need to discuss the verification mechanism for merchants who meet the requirements.
Budi illustrated that a seller might offer Indonesian products while simultaneously selling imported products through the same store. This condition makes the verification process one of the issues that needs to be resolved. “Sellers have the freedom to sell anything. That is why we are currently in discussions with the Ministry of MSMEs,” he said.
He stated that the form, amount, and mechanism of the incentives are still under discussion. The same applies to the verification mechanism for merchants selling 100 per cent Indonesian products.
“Every marketplace has a different system. Therefore, discussions with platforms are necessary. As such, it cannot be verified yet,” said Budi.
As discussions are ongoing, idEA cannot yet confirm when the merchant verification process or the provision of incentives can be fully implemented.