Indonesia gives marketplaces one month to prepare for PPh 22 tax collection

Indonesia's Directorate General of Taxation is providing a one-month grace period for four major online marketplaces to prepare for the collection of Article 22 Income Tax (PPh 22) from sellers. The transition period, starting August 1, 2026, allows companies like Tokopedia, Shopee, Lazada, and Blibli to adjust their systems before commencing tax collection.

Director General Bimo Wijayanto emphasized that this policy does not introduce a new tax but rather modifies the collection mechanism. Previously, domestic traders declared their own taxes. Now, designated marketplaces will collect the tax from sellers on behalf of the government. This is regulated under Minister of Finance Regulation Number 37 of 2025.

The tax rate is set at 0.5 percent of sellers' gross turnover, excluding VAT and luxury goods sales tax. This applies to sellers with an annual turnover exceeding Rp500 million. For example, a seller with Rp2 million in transactions would incur a Rp10,000 tax. The collected amount can be used as a tax credit or count towards final income tax payments for MSMEs.

According to Wijayanto, the government's objective is to enhance tax compliance and foster a more equitable digital economy. This initiative is projected to increase taxpayer adherence and improve tax system efficiency, potentially doubling digital tax revenue.

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What changes is only the collection mechanism, from the previous self-declaration by domestic traders to being collected by the designated marketplace.