The Indonesia e-commerce tax policy may soon change how millions of small sellers operate on platforms like Shopee and Tokopedia. The government plans to introduce a new tax regulation requiring e-commerce platforms to collect taxes on behalf of MSMEs, raising concerns across the online retail sector.
According to Reuters, the planned regulation aims to boost state revenue, which has been declining in recent months. “The planned regulation, which also aims to level the playing field with brick-and-mortar stores, could be announced as early as next month,” a source familiar with the matter told Reuters.
Indonesia E-Commerce Tax Policy Explained
Under the proposed policy, major platforms like Shopee, Tokopedia, TikTok Shop, Lazada, Bukalapak, and Blibli must collect a 0.5% tax on sales made by MSMEs.
Indonesia first introduced a similar regulation in late 2018. It required platforms to share seller data and ensure sellers paid taxes on their income. However, the government withdrew the rule three months later due to pushback from the e-commerce industry.
This time, the Ministry of Finance is spearheading the regulation, although it declined to comment on the plan. The Indonesian E-commerce Association (idEA) also refrained from confirming or denying the details but stated, “The policy would affect millions of sellers if implemented.”
Impact on Shopee Tokopedia Sellers
The proposed e-commerce tax would directly affect Shopee Tokopedia sellers classified as MSMEs. “The platforms will be required to collect and remit a 0.5% sales tax to the tax authority on behalf of sellers with annual revenues between IDR 500 million and IDR 4.8 billion,” one source told Reuters.
This change would automate tax payments but could also introduce complications for sellers who rely on simplified workflows to maintain competitive pricing and efficiency. The scale of the impact is significant, given that millions of MSMEs rely on these platforms for income.
Resistance from E-Commerce Platforms
E-commerce operators are resisting the plan, citing increased administrative burdens and potential loss of sellers. According to sources briefed by tax authorities, the platforms argue that such a policy could drive sellers away from online marketplaces.
Beyond operational costs, platforms are also worried about Indonesia’s recently updated tax system, Coretax. Introduced earlier this year, the system has faced technical issues, raising doubts about its capacity to manage high volumes of seller data.
“The proposal also includes penalties for e-commerce platforms that fail to report on time,” said one source, emphasizing additional concerns for operators.
Digital Tax and State Revenue Challenges
The government is pushing for this digital tax in response to declining revenue. From January to May, state income fell 11.4% year-on-year to IDR 995.3 trillion. Low commodity prices, weak economic growth, and technical disruptions in tax collection contributed to the downturn.
Meanwhile, Indonesia’s e-commerce sector is booming. According to a joint report from Google, Temasek, and Bain & Co., the country’s gross merchandise value reached US$65 billion last year and could grow to US$150 billion by 2030.
This growth presents a major opportunity for tax collection. Authorities see the e-commerce tax policy as a way to secure a steady revenue stream from digital transactions.
What’s Next for MSME Online Taxation
The regulation is expected to be announced as early as next month. If implemented, it would shift tax compliance responsibilities from individual sellers to e-commerce platforms.
Currently, Indonesia offers a 0.5% final income tax incentive for MSMEs. This applies for seven years to individual taxpayers, four years to cooperatives and partnerships, and three years to limited companies. The incentive was set to expire at the end of 2024 but has been extended until the end of 2025. However, the formal decree is still awaiting approval from the State Secretariat.
As the government finalizes the policy, platforms and sellers alike must prepare for what could be a major shift in Indonesia’s digital economy.
Source: ekonomi.bisnis.com
Image: simpson33 / Getty Images
