Indonesian government plans to impose import taxes on software, e-books and other ‘intangible goods’

After going after Google, Facebook and other overseas-based online giants to collect back tax revenue on their online transactions (and managing to extract some major cash from them in the process), the Indonesian tax office will next target intangible digital goods from abroad, such as software and e-books downloads.

The government is planning to implement the new online tax starting in January. But it is currently constrained by a World Trade Organization (WTO) moratorium on charging import tariffs for intangible goods. The moratorium is set to expire at the end of the year, but some countries are lobbying for the intangible tariff moratorium to be extended in the future.

Indonesia is one of several countries pushing for the moratorium to be permanently rescinded starting in 2018 so that they can impose value-added taxes or import duties on software and paid digital downloads such as e-books, songs and similar products since they increasingly make up a major part of the rapidly growing e-commerce market.

“It’s already come to an end in 2017, and we believe there needs to be equality between conventional trading and online . Items and similar goods inside the country are subject to tax , but why can’t we apply them if they’re coming from abroad,” said Deni Surjantoro, head of the sub-directorate of communications at the Directorate General of Customs on Tuesday as quoted by Liputan6.

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