Philippine economy

Indonesia eyes taxes from Facebook, Twitter, Google

Zachary Lee
Indonesia eyes taxes from Facebook, Twitter, Google
Google, Yahoo, Facebook and Twitter previously paid less taxes in Indonesia as representative offices, but have recently been incorporated

JAKARTA, Indonesia – The Indonesian government has set their eyes on Internet companies including Yahoo!, Google, Twitter and Facebook – to ensure they are paying the proper taxes.

On Thursday, April 7, Mekar Satria Utama, director of counseling, service and public relations with the director general of taxes at the Finance Ministry, told Rappler they would look closer into the taxes paid for by online companies. 

“That’s just the first step, as permanent establishments, the companies will be audited to find out whether they were reporting all their income derived from Indonesia,” Utama said.

“We are sure that we’ll have more income by taxing them through the audit.”

Finance Minister Bambang Brodjonegoro, said the 4 technology firms pay corporate income tax in Indonesia but said “we are not sure that they have been paying the taxes correctly in accordance with the amount of businesses they have earned from Indonesia.”

He said some revenue may head offshore without attracting the local value-added tax.

The added focus on the internet giants comes after Google, Facebook and Twitter have just been incorporated in Indonesia last week, after years running businesses as representative offices that enjoyed lower taxes. Now however, they may be charged local taxes.

The minister also expressed confidence this would not scare off the technology companies since Facebook and Twitter have many active users in Indonesia.

There are about 250 milion people in Indonesia, the 4th most populous country in the world. It boasts 88.1 million internet users and 79 million social media users, and is said to be the Twitter capital of the world. – Rappler.com

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