Indonesia has found more tech companies willing to become collectors of the nation’s 10 percent digital services tax.
The nation’s Direktorat Jenderal Pajak (aka the Directorate General of Taxes) has announced that the following ten entities have agreed to embed the tax in the price of their services and to remit funds directly to the government. Here’s the list:
- Facebook Ireland Ltd.
- Facebook Payments International Ltd.
- Facebook Technologies International Ltd.
- Amazon.com Services LLC
- Audible, Inc.
- Alexa Internet
- Audible Ltd.
- Apple Distribution International Ltd.
- Tiktok Pte. Ltd.
- The Walt Disney Company (Southeast Asia) Pte. Ltd.
Indonesia created the tax to raise a new stream of revenue as its economy copes with a post-pandemic contraction, and also to recognise that digital services delivered from outside the nation but consumed within it deserve to be taxed. The tax was first applied to AWS, Google, Spotify and Netflix .
Indonesia says it is already in talks with more digital services providers and hopes to reveal they’ve agreed to become tax collectors, too.
The goal is IRP600m ($41m) of annual revenue, a drop in the bucket compared to 2019/20 government revenues of around $130bn and nowhere near enough to make a difference to the nation’s H1 $17.5bn COVID-caused budget deficit. ®