New VAT on tech companies a big boost for Indonesian government

Jakarta

INDONESIA'S move to levy a 10 per cent value-added tax (VAT) on tech companies operating within its jurisdiction is expected to boost the government's revenue collection in 2021 as its digital economy continues to grow at a rapid pace.

According to tax experts and analysts, the additional revenue collected from the VAT on tech companies could exceed 10 trillion rupiah (S$1 billion) a year, a welcome injection for the government as it faces a looming budget deficit on the back of a slowing economy.