JAKARTA — Indonesia has added new names to its list of technology companies that will be subject to a value added tax — including China’s TikTok and U.S. giant Facebook — as the country continues to seek ways to boost tax revenue to shore up state finances depleted by spending to fight the coronavirus pandemic.
The national tax office announced on Friday that from Sept. 1, three Facebook companies, four Amazon companies, Apple Distribution International, TikTok and Walt Disney’s Southeast Asia business will need to collect a 10% VAT on all digital products and services sold in the region’s largest economy.
Facebook is one of the most used social media platforms in Indonesia and the company announced in June that it has invested in Gojek, a local multi-purpose application platform, while Disney recently announced that it will be launching its streaming service Disney + in the country from Sept. 5, its first launch in Southeast Asia.
The inclusion of TikTok, owned by Chinese tech company ByteDance, on the list likely means that Indonesia has no plans to ban the popular video messaging app, despite security concerns raised by the administration of President Donald Trump, which is forcing a sale of its U.S. operations under the threat of a shutdown. ByteDance and the Chinese government have cried foul, saying the U.S. is targeting TikTok for political reasons.
Indonesia’s move to tax more companies follows a similar decision in July, when the tax office imposed the VAT on other technology businesses including Google, Netflix and Spotify.
The Facebook companies affected by the decision are Facebook Ireland, Facebook Payments International and Facebook Technologies, while the Amazon companies are Amazon.com Services, Audible Inc. Audible Ltd. and Alexa Internet.
The tax office “continues to identify and actively establish communication with a number of other foreign companies selling digital products to Indonesia,” Hestu Yoga Saksama, spokesperson for the office, said in a statement. “It is hoped that in the near future, the number of business actors appointed as VAT collectors for digital products will continue to grow.”