According to new reports, Indonesia is planning to crack down on global internet companies, seeking taxes.
Reported by Reuters, Finance Minister Bambang Brodjonegoro told reporters on Monday that all internet companies must have a local presence in the country and pay Indonesian tax or face being blocked. "All have to create a permanent establishment, like the contractors for the oil sector, so they can be taxed," he said. In a separate statement, Communications Ministry spokesman Ismail Cawidu said that his ministry plans to issue a regulation in March to detail rules for streaming, messaging, and social media services. If these companies to not comply, Indonesia will reduce their bandwidth or block them. Cawidu noted that there may be a transition period for the new rules.
Google, Facebook, and Twitter all already have offices in Indonesia, but even they may face added pressure with these new regulations. Google opened its Jakarta office back in 2012, while Facebook and Twitter followed in 2014 and 2015, respectively. "Google has an office in Indonesia, but digital age transactions do not go through that office. That is what we're looking to straighten out," said Communication Minister Rudiantara. The companies that comply with the new rules will likely face greater scrutiny of their tax reports. Other notable companies like Tumblr and Line are popular in the region but have come under the government's fire. Recently, Tumblr was temporarily banned in Indonesia for having pornographic content on its site. Tumblr's owner, Yahoo, closed its Indonesian office last year.
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