The Indonesian government is reportedly preparing a new regulation that will require e-commerce platforms to withhold income tax from their sellers, a move aimed at strengthening tax compliance in the fast-growing digital sector.
According to documents seen by Reuters and sources from within the e-commerce industry, the regulation will mandate online marketplaces to collect and remit a 0.5 percent income tax (PPh Article 22) from sellers whose annual revenue ranges between Rp500 million (US$30,000) and Rp4.8 billion. This tax initiative − initially postponed − now appears slated for implementation in July 2025.
“The government aims to ensure a level playing field between online merchants and brick-and-mortar retailers,” one of the sources told Reuters on Tuesday, June 24, 2025.
The new rule is expected to directly impact several major platforms operating in Indonesia, including Shopee, Tokopedia, TikTok Shop, Lazada, Blibli, and Bukalapak.
While the Indonesian E-Commerce Association (idEA) has yet to officially confirm or deny the plan, the association acknowledged that the regulation − if implemented − could affect millions of online sellers nationwide.
This tax development comes at a time when Indonesia's state revenue is under pressure. The Ministry of Finance reported that from January to May 2025, government income fell 11.4 percent year-on-year to Rp995.3 trillion. The drop was attributed to weak commodity prices, sluggish economic growth, and temporary disruptions in tax collection systems following recent updates.
Despite the revenue decline, Indonesia’s e-commerce sector continues to thrive. A joint report by Temasek and Bain & Company estimates the country’s gross merchandise value (GMV) had reached US$65 billion in 2024 (Rp1,059 trillion). This figure is projected to more than double to US$150 billion (Rp2,444 trillion) by 2030.
As the digital economy becomes a key engine of national growth, the government’s latest tax push reflects its effort to ensure more inclusive and equitable contributions from all sectors − including the booming online retail space.
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