Marketplaces Reach 50% Readiness for New Tax Collection Mechanism

The Indonesian E-Commerce Association (idEA) has stated that the system adjustments required for marketplaces to collect Income Tax Article 22 are progressing, with platform readiness currently estimated at around 50%. The tax collection mechanism is scheduled to become effective on 1 August 2026. idEA Chairman Budi Primawan said the one-month period provided by the government after the official appointment of marketplaces as tax collectors will be used to finalise various system and business process adjustments. “It is estimated that each platform has reached 50% preparation,” Budi said during a press conference on tax collection for electronic system-based trade at the Directorate General of Taxes (DJP) office in Jakarta on Wednesday. He noted that several technical aspects still need to be aligned with the DJP through regular monthly meetings. The remaining time before implementation will be used to perfect the system and strengthen coordination and communication with the DJP and business actors. Budi emphasised that idEA respects the government’s policy as stipulated in Minister of Finance Regulation No. 37 of 2025. He clarified that the policy does not constitute a new tax, but rather a change in the tax administration mechanism through marketplaces. The DJP has appointed four marketplaces—Tokopedia, Shopee, Blibli, and Lazada—as collectors of Income Tax Article 22 on income earned by domestic traders transacting through their platforms. Budi added that the main focus for marketplaces is ensuring effective implementation, providing legal certainty, and minimising operational impacts for both platforms and sellers. The DJP’s Director General, Bimo Wijayanto, explained that the collection mechanism is designed to be simple. Consumers pay for goods or services through the marketplace, which then collects the Article 22 tax. The marketplace issues an electronic invoice detailing the tax collected, which also serves as the official proof of withholding, eliminating the need for additional documentation. The collected tax is then remitted to the state treasury and reported via the periodic unified tax return. Bimo noted that the tariff is low, set at 0.5% of the domestic trader’s gross turnover, excluding Value Added Tax and Sales Tax on Luxury Goods. The tax collected can be credited against the trader’s annual tax liability, simplifying the end-of-year reporting process.