Indonesia – The Indonesian government is considering new tax regulations that would require e-commerce platforms to withhold a portion of sales income from sellers, according to a Reuters exclusive citing two industry sources familiar with the matter.
Under the proposed policy, platforms would be obligated to deduct and remit a 0.5% tax on behalf of sellers earning between 500 million rupiah and 4.8 billion rupiah annually—classified as small and medium-sized enterprises (SMEs) under current tax rules. These SMEs are already required to pay the same rate directly, but the new regulation would shift that responsibility to the platforms.
One source noted that penalties for late reporting by platforms are also being considered. The planned measure, aimed at increasing state revenue and creating a more level playing field between online and traditional retailers, could be formally announced as early as next month.
If implemented, the regulation is expected to impact major e-commerce players operating in Indonesia, including ByteDance’s TikTok Shop and Tokopedia, Sea Group’s Shopee, Alibaba-backed Lazada, as well as Blibli and Bukalapak.
Several e-commerce platforms have expressed opposition to the proposal, warning that the changes could raise administrative burdens and discourage sellers from using online marketplaces.
The sources’ claims were further supported by the contents of an official presentation by the tax office to platform operators, which Reuters said it had seen.
Indonesia previously attempted to enforce a similar policy that required platforms to report seller data and ensure tax compliance, but the regulation was rolled back three months after its launch following pushback from industry stakeholders.
In addition to concerns about added complexity, platforms are reportedly worried about the capacity of the current tax infrastructure to manage the increased data requirements. Technical issues have persisted since a system upgrade earlier this year.
Indonesia’s finance ministry, which would be tasked with issuing the regulation, declined to comment. The country’s e-commerce association, idEA, did not confirm details of the plan but told Reuters the policy could affect millions of sellers if enacted.
