JAKARTA (IndoTelko) - The government is advised to be careful and wise in pursue of tax of Over The Top (OTT) by considering the business model and the development of the digital economy ecosystem.
"Basically we agree on tax pursue on OTT, especially with foreign players. Digital colonial is feared to occur if these foreign players are left alone. But the government must be clever and careful in imposing these levies," said Chairman of the Indonesia Creative ICT Industry Society (Mikti) Indra Utoyo in Jakarta, Thursday (7/4).
Indra said that in the digital economy era we must first understand the presented business model, modified value chain and new roles present from the technology.
For example, for the Online Travel Agents (OTA) services in which each transaction are subject to tax, the income fee would be lesser if they have additional burden.
"The OTA businesses are liked and often used by the people. Just look at Traveloka, Tiket.com and others. So, the government must also make a wise calculation," Indra said.
Separately, CEO of Bhinneka.com Hendrik Tio suggested that the government shouldn't put additional tax burden for eCommerce players, because the sector has been running their business similar to other offline players.
Hendrik questioned on the government's plan to impose a tax free for marketplace and classified ads players because it provides online trading platform for traders.
"This idea confuses us, as there is no legal basis. The government must be fair and not making reasons to collect tax for the recently popular eCommerce," he said.
Previously, the Minister of Communication and Information Technology Rudiantara admitted to seriously pursuing taxes from foreign OTT players such as Facebook, Google, and Twitter.
MInister Rudiantara's idea is also supported by the Ministry of Finance Bambang PS Brodjonegoro which will clarify the status of the global digital business giant in Indonesia, whether it has been establish as a permanent Enterprises (BUT) or merely as a representative office (rep office)
Finance Minister Brodjonegoro mentioned that Yahoo Indonesia since 2009 has been registered as a legal entity in Indonesia with the status of Foreign Direct Investment (FDI) at Tanag Abang Tax Office. PT Yahoo acted as a dependent agent of Yahoo in Singapore, when running their business
As a result, in accordance with Article (2) Paragraph (5) letter (N) of the Act PPH, Yahoo's status is recorded as a permanent enterprise (BUT). Then the status was declared as Yahoo Singapore Pte Ltd Indonesia.
Income received by Yahoo Singapore is sourced from Indonesia for example advertising services that becomes Yahoo Singapore Pte Ltd Indonesia income as a permanent enterprise (BUT) in accordance with Article 5, paragraph 1 of Law PPH.
Examination is currently being conducted exclusively by the Jakarta Regional Directorate General of Tax Office to ensure that Yahoo had reported all the advertising service they received from Indonesia, despite its status as a Yahoo Singapore Pte Ltd. The examination result is used to clarify their tax payment obligation.
Next, the Taxation Directorate General is targeting Google who is already registered as a legal entity in the country, in Tanah Abang III tax office as foreign investor status since 15 September 2011.
Google also act as the dependent agent of Google Asia-Pacific in Singapore. Currently the company is doing their tax payments obligation.
Meanwhile, Twitter has registered as a rep office of the Twitter Asia-Pacific at the tax office on 22 April 2015. In running their business Twitter is acting as dependent agent of Twitter Asia-Pacific in Singapore.
The income received by Twitter Asia-Pacific Singapore is sourced from Indonesia including advertising, will become Indonesia's tax revenues. Facebook has also been registered at tax office only as rep office of Facebook in Singapore since February 10, 2014.
In conducting its business, Facebook acted as a dependent agent of Facebook Singapore, their incomes including advertising services should be submitted as part of Indonesian tax revenue. Examination is currently being conducted on Facebook.(es)