Jakarta, July 1 -- Indonesia began implementing a new tax collection mechanism for online marketplace sellers on July 1, requiring e-commerce platforms to withhold and remit income tax on behalf of merchants.

Indonesia's Directorate General of Taxes said technical preparations had been completed following weeks of coordination with major e-commerce platforms. The list of designated platforms authorised to collect taxes was expected to be announced soon.

Under the new rules, e-commerce platforms will withhold income tax under Article 22 at the point of each transaction, replacing the previous system in which sellers were responsible for calculating and paying their own taxes.

The government expects the shift to platform-based tax collec...