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Saturday, May 30, 2020, 17:02
Southeast Asia’s largest economy readies digital goods tax rule
By Bloomberg
Saturday, May 30, 2020, 17:02 By Bloomberg

In this July 24, 2016 file photo, an Indonesian Muslim woman, Raditya, plays Pokemon Go game on her smartphone in Yogyakarta, Indonesia. (ULET IFANSASTI / GETTY IMAGES VIA BLOOMBERG)

Indonesia’s government is preparing a regulation to enable it to collect a 10 percent value-added tax on digital products from August, matching a similar levy already imposed on physical goods.

The rule will detail the range of products to be taxed and how the levies will be collected, according to a statement from Indonesia’s tax office

The rule will detail the range of products to be taxed and how the levies will be collected, according to a statement from Indonesia’s tax office. Subscriptions to film and music streaming services, purchases of online content and digital gaming are among the range of products and services that will be covered, the tax office said.

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While Indonesia has been planning to tax digital companies for years as a way to boost revenue, spending on products such as Netflix and Zoom has “soared amid the Covid-19 outbreak,” Finance Minister Sri Mulyani Indrawati said earlier this year. Indonesia’s tax revenue dropped 3.1 percent annually in the January-April period as the contagion hit. The government has cut this year’s economic growth forecast to 2.3 percent, while warning that it may contract.

READ MORE: Indonesia files lawsuit against EU at WTO over palm oil


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