Indonesia Plans E-Commerce Tax on Online Sellers

Indonesia is preparing new regulations that require e-commerce platforms to withhold and remit a 0.5% tax on sales income from small and medium-sized sellers, aiming to improve tax compliance and tackle the shadow economy in the fast-growing digital sector. The tax will apply to sellers with annual revenues between 500 million and 4.8 billion rupiah, shifting the tax remittance responsibility from sellers to platforms. Major marketplaces impacted include TikTok Shop and Tokopedia (ByteDance), Shopee (Sea Ltd), Lazada (Alibaba), Blibli, and Bukalapak. While the government hopes to implement the rule as early as July 2025, e-commerce associations and platforms are urging for a phased and realistic adjustment period due to concerns about administrative burdens, technical readiness, and potential disruption to millions of sellers. Penalties for late reporting are also being considered to ensure compliance. This initiative is part of a broader effort to increase state revenue amid recent declines and to create a level playing field between online and traditional retailers.