TikTok Shop Has Not Been Subject to E-Commerce Tax Even though There Are Buying and Selling Transactions

Reporter: Siti Masitoh | Editor: Khomarul Hidayat

KONTAN.CO.ID – BOGOR. The Directorate General of Taxes (Ditjen Tax) of the Ministry of Finance said that TikTok Shop has not yet been subject to e-commerce tax, even though the company has carried out buying and selling transactions.

Director of Compliance and Revenue Potential at the Directorate General of Taxes, Ihsan Priyawibawa, said that currently TikTok is only registered as a company that is subject to Value Added Tax (VAT) Trading Through Electronic Systems (PMSE). This means that the Directorate General of Taxes only accepts taxes from advertisers who display on Tiktok.

“TikTok is registered with us as one of the PMSE VAT collectors. So TikTok makes tax payments on VAT collection activities on its transactions in Indonesia. “So Indonesians use TikTok’s services and collect VAT,” said Ihsan at a media gathering, Tuesday (26/9).

Also Read: This is TikTok Indonesia’s response to the ban on selling via social e-commerce

Ihsan said that currently his party will still study TikTok’s business model if the company registers as an e-commerce company.

“The treatment will be the same, as with the others. This means whether TikTok is a domestic or foreign taxpayer. “So we will first study the business model that TikTok will use,” he explained.

For your information, TikTok Shop will be prohibited from carrying out buying and selling transactions within the application. This is because TikTok only operates as a social media because it is registered as an Electronic System Provider (PSE) with the Ministry of Communication and Information (Kominfo). TikTok has not received an Electronic Trading System (PMSE) permit from the Ministry of Trade.

The government itself will revise Minister of Trade Regulation (Permendag) Number 50 of 2020 concerning Provisions for Business Licensing, Advertising, Development and Supervision of Business Actors in Trading Through Electronic Systems.

Minister of Trade (Mendag) Zulkifli Hassan said that in the revised regulations, a number of provisions related to electronic commerce would be regulated. One of them, the Indonesian government will ban social media that doubles as e-commerce or offline buying/selling platforms.

This is done by the government to prevent misuse of people’s personal data. The government only allows social media such as TikTok, Instagram, Facebook, WhatsApp, to be used to facilitate the promotion of goods or services, not for online buying and selling transactions.

This is done by the government to prevent misuse of people’s personal data. The government only allows social media such as TikTok, Instagram, Facebook, WhatsApp, to be used to facilitate the promotion of goods or services, not for buying/selling transactions like marketplace platforms.

“Social media can only be for promotion like TV. On TV, advertising is allowed, but TV can’t accept money, right. So it’s a kind of digital platform, so its job is to promote,” said Zulkifli.

Also Read: Not only TikTok, the government prohibits all social media from being used as a place to sell

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