Indonesia has its eyes set on Facebook as its next target for a tax crackdown as it nears a settlement with Google.
Facebook, which counts more than 88mn Indonesians among its users, owes about 2tn rupiah ($148mn) to 3tn rupiah in unpaid taxes and penalties, Muhammad Haniv, head of special taxpayers office at the Finance Ministry’s Tax Directorate-General, said in an interview in Jakarta. The office has sent a letter to the company’s office in Ireland, calling for a meeting to discuss the issue, he said.
Yunita Purnamasari, an external spokeswoman for Facebook in Jakarta, said she couldn’t immediately comment on the tax demand.
Indonesia’s government is seeking to boost revenue as it tries to keep the budget deficit below the legal limit of 3%. Authorities have turned to Instagram Inc, stars and merchants peddling goods and services on social media to bridge a revenue shortfall as an ambitious tax amnesty programme loses steam after earning the government 97.1tn rupiah in the first three months of its start in July.
Authorities also plan to review tax liabilities of Twitter Inc and Apple Inc, Haniv said.
Indonesia’s government plans to drop claims on any unpaid taxes and penalties it has sought from Google if a settlement is arrived through negotiations, Haniv said. The settlement with Google, the largest unit of Alphabet Inc, may come as early as next week and the government will focus on ensuring the company pays all future taxes, he said. The company owes about 5tn rupiah in taxes and penalties, he said.
Taj Meadows, Google’s head of policy communications for Asia Pacific, declined to comment yesterday and referred to an earlier statement that said the company had paid all applicable taxes and will continue to fully cooperate with the Indonesian government.