The Ministry of Finance’s decision to postpone Article 22 income tax collection on online marketplace transactions gives digital businesses more time to prepare.
Minister of Finance Purbaya Yudhi Sadewa said the decision was made to safeguard purchasing power and support economic recovery. Enforcement of Minister of Finance Regulation Number 37 of 2025 has been postponed until the end of October 2026, with the new tax collection scheme scheduled to take effect on November 1, 2026.
The appointment of Tokopedia, Shopee, Lazada, and Blibli as Article 22 income tax collectors has also been temporarily revoked, while collected taxes will be refunded to merchants. Rather, the policy changes when and how the tax is collected, with marketplaces collecting it earlier in the transaction process.
However, bringing forward the timing of tax collection means businesses may experience a temporary reduction in cash flow at the beginning of a transaction.
Supporting the Digital Ecosystem
The delay gives the digital commerce ecosystem more time to grow without new administrative requirements.
At the same time, the delay also means that the Directorate General of Taxes’ efforts to obtain more reliable transaction data from merchants for monitoring tax compliance among digital businesses will be put on hold.
A Level Playing Field
The government has said that the changes to marketplace tax collection are intended to create a level playing field between online and offline merchants. However, the proposed mechanism may still require further consideration to ensure that both groups receive genuinely equitable tax treatment. This is because offline transactions are not generally subject to the same Article 22 income tax collection proposed for marketplace transactions.
Not all offline transactions are subject to tax withholding or collection. Article 23 income tax and Article 4(2) final income tax may apply to services and rental transactions, while Article 22 income tax applies only to specific commodities or transactions. By contrast, marketplace transactions may be subject to Article 22 income tax more broadly. As a result, substantively similar transactions could receive different tax treatment merely because one takes place through a marketplace.
Although the tax collected can be credited, sellers will still need to adjust their administrative processes and absorb the resulting cash flow impact from the outset. Offline merchants, meanwhile, do not face the same burden.
Tax Refunds
Purbaya also stated that taxes already collected will be refunded. The process should be straightforward because marketplace transactions are digitally recorded.
Until the revised policy takes effect, the government could make greater use of the tax authority’s existing digital data capabilities. Data exchanges with marketplaces, data analytics, and technology-based compliance monitoring could complement the marketplace tax collection policy.
The approach would allow the digital ecosystem to grow without excessive upfront administrative burdens. By combining data-driven tax administration with a measured implementation process, the government can continue to fortify tax compliance whilst maintaining a supportive environment for digital businesses.
