Jakarta, 25 October 2023 – The provincial government of Jakarta is expressing its plan to tax online shops and online ojek. However, as stated by the Head of Jakarta Local Revenue Office Lusiana Herawati, the capital city still awaited a clear regulation on online shops and online ojek to be released by the central government.
“For now, the provincial government of Jakarta is waiting for the [central government’s] regulation before proceeding with the next steps,” she said when met in Jakarta on Monday, October 23, 2023.
She stated that the Jakarta Administration proposed the tax implementation since the central government has implemented income tax and added value tax for e-commerce. Lusiana believed the central and provincial governments must cooperate to avoid double taxation since digital development provided an alternative instrument of tax intensification for e-commerce transactions.
“Digitalization brings with it a novel challenge, especially in disentangling central and local taxes,” she said.
Additionally, the potential tax revenue from digital activities is quite significant. However, Lusiana did not provide the detailed number this will bring to the province. Digitalization, she added, created an opportunity and challenge for the central and regional government to boost the tax revenue potential.
Meanwhile, Jakarta Regional Secretary Joko Agus Setyono was unable to provide details on the tax implementation since the region has only been submitted to the Finance Ministry.
“We have only just been communicating with the central government since it’s the one who gets to decide on tax issues,” he said.
Joko believed tax implementation for online shops and online ojek is necessary, but this idea could only be implemented with the green light from the central government.