REPUBLIKA.CO.ID, JAKARTA -- The government has finalized a regulation on electronic or e-commerce, including taxation for such operators. The government also vowed to impose tax fairly on e-commerce to avoid a gap between conventional and digital trade operators.

"We have finalized inter-institution discussions, and now, we are formulating a ministerial regulation," Finance Minister Sri Mulyani noted here on Friday after a press conference on the foiling of an attempt to smuggle 40 kilograms of methamphetamine in Aceh.

According to Mulyani, some parties had suggested that the government should adopt an unbiased approach. "Some inputs, basically proposed follow the principle of evenhandedness, which means both will have a level playing field. The tax imposed on both e-commerce and conventional commerce will be the same, especially those linked to value-added tax," Mulyani explained.

On the final income tax on small and medium enterprises (SMEs), the government has planned to reduce its tariff from one percent to 0.5 percent in a bid to boost their competitiveness to better compete with imported products in the digital era.

The tax will be imposed on personal taxpayers and SMEs, with an annual turnover of less than Rp4.8 billion. "Most of the suppliers for merchants are SMEs. We are proposing a revision to reduce the final income tax from one percent to 0.5 percent. Maybe the threshold could be lower too," the minister added.

Earlier, the government had asserted that tax imposition on e-commerce will focus on its mechanism instead of imposing a new type of tax.

The tax will be imposed for e-commerce operators that have the application, and it will not be set as a new object since the government had only changed the transaction method, from conventional to electronic.

The government is still evaluating the method for the imposition of tax, as taxpayers in the e-commerce sector have various characteristics.

"With regard to the mechanism, it will use the current general provision on taxation on who will collect and report, and how the process will be carried out. We will see and disseminate information on this," Mulyani added.

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