Indonesia is preparing new regulations requiring e-commerce platforms to withhold income tax from their sellers, a move aimed at strengthening tax compliance in the fast-growing digital sector, Reuters reported. The regulation will mandate online marketplaces to collect and remit a 0.5% income tax from sellers with annual revenues between Rp500 million (USD 30,000) and Rp4.8 billion. This tax initiative, initially postponed, is now slated for implementation in July 2025. “The government aims to ensure a level playing field between online merchants and brick-and-mortar retailers,” a source told Reuters on Tuesday, June 24, 2025. This development comes as Indonesia’s state revenue faces pressure. The Ministry of Finance reported that from January to May 2025, government revenue fell 11.4% year-on-year to Rp995.3 trillion, primarily due to weak commodity prices and sluggish economic growth.
