E-commerce Platforms Ready to Withhold Seller Tax, Await DJP Written Directive

The Indonesian E-Commerce Association (idEA) has stated its support for the government’s efforts to improve tax compliance and has confirmed it will adhere to all applicable regulations. However, the industry is still awaiting a formal written decision from the Directorate General of Taxes (DJP). idEA Chairman Budi Primawan said the association is continuing to coordinate with the DJP to ensure smooth implementation of the policy. “In principle, idEA supports the government’s efforts to improve tax compliance and will comply with the applicable regulations,” Budi said in a statement. He expressed hope that the administrative mechanism to be implemented will be effective, simple, and provide certainty for all stakeholders, including the government, digital platforms, and sellers. Budi revealed that idEA is still waiting for a written decision from the DJP containing the results of joint discussions with digital platforms regarding various technical aspects of the policy’s implementation. Based on these discussions, platforms are expected to have approximately one month from the official enactment of the implementing rules to adjust their systems before beginning the tax collection mechanism. “However, this is still awaiting official stipulation,” he clarified. idEA is also awaiting communication and outreach from the DJP to taxpayers, particularly sellers, so they understand the applicable mechanism and can prepare accordingly. The tax collection refers to Minister of Finance Regulation Number 37 of 2025, which requires marketplace providers to collect Income Tax Article 22 at a rate of 0.5% on the gross turnover of domestic merchants transacting on their platforms. This collection is intended solely to equalise tax treatment between online traders and conventional brick-and-mortar businesses, with no difference in the tariff applied to both.