New Tax on E-Commerce Sellers in Indonesia

As Southeast Asia‘s largest economy, Indonesia is working on a new regulation aimed at increasing tax collection. The regulation also seeks to level the playing field between physical and online stores.

According to a report by Reuters, under the new regulation, e-commerce platforms will be required to withhold tax from sellers’ sales revenue. The regulation could be announced as early as next month.

0.5% Tax Deduction on E-Commerce Revenues of Indonesian SMEs

Under the new regulation, a 0.5% tax will be deducted from the sales revenue of sellers (SMEs) whose annual turnover ranges from 500 million rupiah to 4.8 billion rupiah. Platforms that delay reporting will face penalties. While SMEs already pay this tax rate directly, the new regulation will transfer this responsibility to the platforms.

Major E-Commerce Marketplaces to Be Affected

The regulation will directly impact e-commerce companies operating in Indonesia. While platforms oppose the proposal, arguing that it may increase administrative costs and drive sellers away, authorities remain firm.

The platforms expected to be most affected include TikTok Shop, Tokopedia, Shopee, Lazada, Blibli, and Bukalapak. The regulation is set to impact millions of e-commerce sellers.

Previous Attempt Withdrawn Amid Backlash

Indonesia previously attempted a similar regulation in 2018, requiring marketplace operators to share seller data and pay taxes on sales revenues. However, the regulation was withdrawn just three months after implementation due to industry backlash. So far, Indonesian public authorities and e-commerce associations have refrained from commenting on the new proposal.

Meanwhile, the country’s e-commerce ecosystem continues to grow steadily. According to a report by Bain & Co., Indonesia’s gross merchandise value (GMV) in e-commerce reached $65 billion in 2024. The market is projected to reach $150 billion by 2030.