Indonesia Refines E-Commerce Tax Rules for 2025

Indonesia is implementing a refined e-commerce tax regulation in 2025 that introduces a 0.5 percent withholding tax on sales from merchants with annual turnovers between 500 million and 4.8 billion rupiah.

The rule positions e-commerce platforms as tax collectors, marking a significant shift in digital tax compliance. Crucially, the regulation excludes specific sectors like motorcycle taxi drivers (ojol), gold merchants, and mobile credit sellers, citing pre-existing tax provisions such as PMK 48/2023 for gold transactions.

Key Highlights

• Platforms must withhold 0.5 percent tax from merchants earning 500M–4.8B IDR
• Key sectors like ojol, gold merchants, and mobile credit sellers are exempt
• Regulation aims to curb tax leakage and formalize mid-size digital sellers

According to Hestu Yoga Saksama, these exemptions reflect a sector-specific digital tax strategy, avoiding double taxation and recognizing varied business models.

This approach aims to formalize medium-sized digital businesses while protecting micro-entrepreneurs, targeting Indonesia’s fast-growing e-commerce market, valued at $90 billion and projected to reach $150 billion by 2030. It mirrors a similar model adopted by Vietnam, where platforms withhold VAT and personal income tax from sellers.

Also Read: Indonesia's New E-Commerce Tax Targets SME Sellers

By leveraging the technological infrastructure of platforms instead of relying on individual compliance, the regulation seeks to combat the shadow economy, improve tax compliance, and reduce tax leakage in the digital ecosystem.