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Talks to rewrite rules for cross-border taxation, including
digital taxes, led by the Organisation for Economic Cooperation
and Development, stalled this year, with a new deadline for an
agreement extended to 2021.
Indonesia, Southeast Asia's biggest economy, has begun
collecting a 10% value-added tax (VAT) since mid-2020 on digital
products and services from internet-based firms, but officials
had previously said it would charge a tax on income only after a
global consensus was reached.
Finance Minister Sri Mulyani Indrawati told a virtual news
conference that, based on the VAT payments, the tax office could
estimate how much in income digital firms derive from Indonesia.
"Of course we hope for a global taxation agreement, it would be
so much better as it gives a certainty," the minister said.
"But it does not mean we cannot collect the taxes. The
difference is we will not be doing something that is based on a
formula advocated by the OECD," she said.
The European Union is also considering going ahead with a
bloc-wide tax on digital services if a global deal is not
reached by mid-2021.
The United States in June launched an investigation into digital
services taxes being adopted or considered in several
jurisdictions, including the EU and Indonesia.
Indonesia's tax office said 16 digital companies had paid 297
billion rupiah ($21.06 million) in VAT as of October.
Indonesia's digital economy is set to reach $44 billion in 2020
and is expected to grow to $124 billion by 2025, according to a
recent study by Google, Temasek Holdings and Bain & Company.
($1 = 14,100.0000 rupiah)
(Reporting by Gayatri Suroyo and Maikel Jefriando; Editing by
Alex Richardson)
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