The Directorate General of Taxes (DGT) is drafting a policy to appoint marketplaces as withholding agents for Income Tax Article 22 (PPh 22) on goods sold through online platforms. This mechanism is an adaptation to the growth of the digital economy and aims to simplify and strengthen the tax withholding system. According to DGT, this policy is merely a shift in mechanism from the previous arrangement where online sellers made tax payments themselves, to now being collected by the marketplace as the appointed party by the government.

What’s the Purpose?

• To simplify tax compliance for online sellers.
• To integrate the tax system directly into marketplace platforms.
• To enhance the efficiency of tax collection and reporting through digital means.
• To close loopholes in untracked (shadow economy) transactions.

Is This a New Tax?

No. This policy only changes the collection mechanism. It does not introduce a new tax. The tax that was previously paid by sellers will now be collected by the marketplace as the government-appointed collector.

What’s the Legal Basis?

Refers to Article 32A of the General Taxation Provisions and Procedures Law (UU KUP), which gives the Minister of Finance the authority to appoint third parties to withhold, collect, remit, and/or report taxes. Marketplaces are considered as parties that facilitate transactions between business actors.

Will MSMEs Be Affected?

No. Public concerns about potential tax burdens on small businesses have been addressed. Individual domestic sellers with annual turnover below IDR 500 million are still not subject to income tax, in line with existing regulations. MSMEs continue to receive fiscal protection. Appointing marketplaces as Article 22 income tax collectors is not intended to add burden, but to create a digital tax system that is simpler, more accurate, and fairer.