Online Tax Rule Empowers Indonesian MSMEs, Says Finance Ministry
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JAKARTA, Investortrust.id — The Indonesian Finance Ministry has defended a new regulation requiring online marketplaces to collect income taxes from domestic merchants, stating the policy is not a burden but a way to formalize and strengthen micro, small, and medium enterprises (MSMEs).
Yon Arsal, Expert Staff to the Finance Minister for Tax Compliance, said many MSMEs are eager to pay taxes as a badge of legitimacy and success. He noted that the new framework introduced under Finance Ministerial Regulation No. 37 of 2025 simplifies the taxation process by shifting the administrative burden to the platforms.
“We see many taxpayers wanting to contribute, but calculating and reporting taxes on their own can be difficult,” Yon told reporters at the Directorate General of Taxes (DJP) office on Monday, July 14.
The new regulation, known as PMK 37/2025, designates e-commerce platforms as tax collectors and administrators. The rule mandates that income tax (PPh) be automatically withheld from sellers conducting transactions through electronic systems, such as marketplaces.
According to Yon, this system aligns with conventional tax justice. MSMEs are subject to a 0.5% final income tax, a rate that has been in place since Government Regulation No. 55 of 2022. He emphasized that businesses already paying this rate have not been held back from growing.
“In fact, many MSME entrepreneurs are proud to pay large tax amounts—it’s proof that their businesses are thriving,” he said.
Automatic Collection, No New Tax
Director of Tax Regulation I at the DJP, Hestu Yoga Saksama, reiterated that the new rule does not introduce a new tax. Instead, it operationalizes the existing PPh rules by using digital platforms to assist sellers in tax collection, reporting, and remittance.
“Let me emphasize again, this is not a new tax,” Hestu said during a media briefing on Monday.
Under the regulation, individual sellers with annual revenues between Rp 500 million and Rp 4.8 billion ($30,500–$293,000) are subject to a 0.5% final income tax. Those below the Rp 500 million threshold are exempt. The same 0.5% rate applies to corporate taxpayers earning up to Rp 4.8 billion, while higher-income entities are subject to regular income tax rates, with tax credits available during the annual filing process.
Hestu explained that many online sellers struggle with compliance, especially in self-reporting and payment. By involving marketplaces, which already manage transaction records, the system is designed to reduce friction and encourage better compliance.
Marketplace Collaboration Underway
The Finance Ministry stressed that only established digital platforms will be appointed to collect taxes. New or smaller marketplaces will be given more time to adjust their systems and meet regulatory requirements.
“We’re discussing timelines with each platform individually to assess their readiness,” said Hestu. “This regulation is designed to ensure equal treatment, not create sudden burdens.”
Rosmauli, Director of Extension, Services, and Public Relations at the DJP, added that the approach is aimed at building a fairer digital economy.
“With this regulation, MSMEs can fulfill their tax obligations more easily, while being treated equally and supporting a healthy digital economy,” she said.
To avoid incorrect taxation, sellers are encouraged to report their annual revenues through a formal declaration. Those failing to submit such information risk automatic withholding, even if their revenues are below the taxable threshold.
Digital Ecosystem Support
As part of its digital inclusion strategy, the government is also working with state-owned enterprises to support MSMEs. PaDi UMKM, a B2B marketplace developed by PT Telkom Indonesia Tbk (Telkom) under its Leap-Telkom Digital initiative, continues to bridge MSMEs with funding and procurement opportunities.
The platform is expected to play a role in integrating MSMEs into the tax ecosystem while providing broader market access and business development services.