New E-Commerce Tax Starting August: What 0.5% Withholding Means for Online Sellers and Buyers
A 0.5% withholding tax will be applied to online sellers starting in August. Understand the new rule and what steps sellers and buyers should take.
In August 2025, the Indonesian government will commence enforcement of a 0.5 percent withholding tax on transactions carried out through prominent e-commerce platforms Tokopedia, Shopee, TikTok Shop, and Lazada. This policy aims to enhance revenue collection while increasing supervision into e-commerce activities.
Under the tax collection policies, digital platforms will withhold the tax at source from the gross sales and remit it to the appropriate authorities. This policy affects all sellers regardless of whether they are registered large retailers or informal micro businesses. The intention is to encourage more enterprises to join the formal economy by mandating clear registration and documentation processes.
Unregistered sellers will need to obtain a taxpayer identification number (NPWP) and start maintaining proper business records. Those who are already registered are advised to align their accounting and reporting systems with the new regulations to avoid discrepancies during reconciliation.
In principle, the 0.5 percent withholding tax will only marginally decrease net income for sellers. Businesses particularly those with thin margins may need to rethink their pricing structures. Buyers will see slight increases in prices, especially for low-value or high-volume products.
The regulation reflects a wider push by the government to ensure seamless integration of financial transactions into the economic activities within the country.