Google to Meta Taxes Escaping to Singapore, Says Celios

The Centre of Economic and Law Studies (Celios) has stated that tax revenue from the global Over-the-Top (OTT) industry is disproportionate to revenues that reach trillions of rupiah. “When advertisements are displayed in Indonesia, the tax actually flows to Singapore, because the headquarters of Google, Meta, and so on are in Singapore, not in Indonesia,” said Nailul Huda, Director of Digital Economy at Celios, during a study dissemination session in Jakarta on Tuesday, 2 June 2026.

Huda made these remarks while presenting Celios’s study on the governance of the OTT industry in Indonesia. In its study, Celios noted that the Gross Merchandise Value (GMV) of global OTT platforms in Indonesia reached Rp 1,350 trillion in 2024. However, the tax contribution ratio of the digital sector to the digital economy within the national economy stands at only 0.27 per cent.

According to Huda, the minimal tax revenue is due to the fact that most digital tax collection still relies on Value Added Tax (VAT) on trades through electronic systems (PPN PMSE). This means that the tax for the OTT industry is largely borne by consumers in Indonesia, rather than the platforms themselves.

In addition to the tax burden falling on consumers, Huda stated that a driver of low tax revenue from OTTs is that global OTT platforms do not hold the status of a Permanent Establishment (BUT) or do not have physical offices in Indonesia. “When we say, ‘Google, come and pay your taxes and so on,’ they feel that because they do not have an office here, why should they pay tax?” said Huda.

However, Huda noted that Indonesia possesses a legal framework that requires platforms to register as a Permanent Establishment in Indonesia, namely Law Number 2 of 2020 on Job Creation. This regulation, Huda said, provides the basis for taxation based on Significant Economic Presence (SEP) for foreign tax subjects that have significant economic dependence in Indonesia without a physical office.

To measure the economic impact on OTT platforms, Huda believes the government needs to implement thresholds based on user numbers, transaction volumes, or advertising revenue. He cited recommendations from the Organisation for Economic Co-operation and Development (OECD), which suggests a minimum tax of 15 per cent for global OTTs that earn at least Rp 13 trillion per year, a net profit of Rp 10 trillion, and a minimum revenue of at least Rp 500 billion in Indonesia. In this way, global OTT platforms with a large market share in Indonesia must pay taxes in accordance with the regulations.

Huda stated that Celios has three policy scenarios for digital taxation in Indonesia. The first involves a 1 per cent withholding tax (WHT), a 3 per cent WHT, and a 0.75 per cent Universal Service Obligation (USO) levy. Several countries, such as South Korea, Turkey, and members of the European Union, have implemented such levy schemes to maximise state revenue and encourage the digital industry.