Indonesia Gives Marketplaces One Month to Prepare for New Tax Collection System

Indonesia's Directorate General of Taxation is giving four online marketplaces a month to prepare for a new tax collection system. The transition period, ending July 31, 2026, allows these platforms to ready their systems before they begin collecting income tax (PPh) Pasal 22 from sellers.

The new policy, outlined in Ministry of Finance Regulation No. 37 of 2025, designates these marketplaces as tax collectors. This means the tax, previously self-reported by domestic merchants, will now be collected by the marketplaces themselves. The collection will apply to sellers with annual turnovers exceeding Rp 500 million. For example, a seller with a Rp 2 million transaction will have Rp 10, or 0.5%, collected as tax.

Director General of Taxation Bimo Wijayanto clarified that this is not a new tax but a change in the collection mechanism. The collected amount can be used as a tax credit for those under the general tax scheme or as part of the final tax payment for small and medium enterprise (SME) operators. The government stated the objective is to boost tax compliance and ensure more equitable governance of the digital economy.