JAKARTA. After being delayed, the government plans to begin implementing Income Tax Article (ITA) 22 withholding for merchants selling through online marketplaces in July 2026. The policy is intended to create fairer competition between online and brick-and-mortar businesses.
Director General of Taxes Bimo Wijayanto said the regulation underpinning the policy is ready. The government is currently consulting with industry players to ensure they are prepared for its implementation.
"We are aiming for this year, in July. Hopefully," Bimo said after a meeting with the House of Representatives' Budget Committee at the Parliament Complex in Senayan, Jakarta, on Wednesday (June 17), as quoted by bisnis.com.
According to Bimo, the policy does not introduce a new tax. The government has previously implemented a similar mechanism for collecting Value Added Tax (VAT) on Electronic Commerce (PMSE).
The Directorate General of Taxes (DGT) has already appointed hundreds of PMSE businesses to collect VAT, including marketplaces such as Shopee, Tokopedia, Lazada, and Blibli, as well as global digital companies operating in Indonesia.
Aiming for Fairer Competition
The government believes collecting Income Tax Article (ITA) 22 through online marketplaces will help establish a level playing field between online and offline businesses.
"They should be well prepared because this is essentially about creating a level playing field. It's about ensuring fairness between offline and online businesses," Bimo said.
The policy initiative had previously been postponed due to economic considerations. However, Finance Minister Purbaya Yudhi Sadewa said the government could revisit the policy if economic growth remains on track.
"The economy is looking quite good now. If second-quarter growth remains solid, we will consider moving forward with the policy to make competition between online and offline businesses fairer, based on a clear analysis of the data we have," he said.
According to Purbaya, the proposal is also in line with requests from traditional market traders, who have called for more equal competition with online sellers. (KEN)
