Internet giants' tax records under scrutiny in Indonesia

Indonesia is examining the tax records of US internet giants such as Google, Facebook and Twitter, an official said Tuesday, according to media reports.

The government is pursuing what officials say are taxes owed by Google for advertising revenue from as far back as 2011, when the search giant first established its Indonesian operations. 

"We are seeking full clarification," Hestu Yoga Saksama, spokesman for the director general of taxation at the Finance Ministry, was quoted as saying by Tempo.co news website.  

"Everyone will have to abide by regulations," he said. 

He did not say how much Google or other tech giants owned the government.

Google said in a statement that it "has paid all applicable taxes in Indonesia."

Neither Facebook nor Twitter have commented publicly on the matter. The Ministry of Communications and Information said Google and Facebook were responsible for 80 per cent of Indonesia's total digital advertising revenue, worth about 800 million dollars last year, but that their incomes are not properly taxed. 

Total digital advertising revenue for Indonesia this year is expected to top 1 billion dollars, the ministry said. 

Indonesia is one of the biggest markets for Facebook and Twitter. 

The government of President Joko Widodo is trying to raise 117 billion dollars in tax revenue this year to fund projects to upgrade creaky infrastructure, one of his key programmes.

It is seeking to collect 12.5 billion dollars through a tax amnesty programme, which was introduced earlier this year, but so far has only managed to raise 1.7 billion dollars.

Last update: Tue, 20/09/2016 - 13:22
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