CITAX

Instagram Users Criticize Indonesian Taxman's Social Media Crackdown

JAKARTAGLOBE.BERITASATU.COM | Oktober 2016
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Jakarta. Instagram users are skeptical of the tax office’s new plan to increase tax collection by snooping on social media accounts in an attempt to find potential tax revenue, citing possible misunderstandings and wasted resources.
“I have some contract-based and unpaid endorsements for friends,” Ringgo Agus Rahman, an actor-comedian, told the Jakarta Globe over the weekend.
Ringgo, who has featured in over 30 films, television shows and advertisements, has 881,000 followers on his Instagram account, where he often endorses brands or events.

“Some big brands provide a contract, which is taxed, but I may only get the product for some other brands. I hope the government can understand this kind of thing,” he said.
According to Ringgo, he uses his private Instagram account to tell his life story and he considers the promoted content as “bonuses.”
He said he now understands that he must pay tax on his income after receiving a call from the Bandung tax office in relation to tax reports from 2011 and 2015.
He said his experiences were “pleasant and fair” as he received help and detailed explanation from the officer in charge of him at the time.
“We should not worry about the tax for our rightfully-received money,” he said.
“Look at the officials who drive fancy sports cars, as they are who should be worried.”
Ringgo welcomed the directorate general of taxes’ upcoming strategy, but said the government must have a clear scheme and know who the targets really are.
Desperate measures
Ringgo’s comments come after Yon Arsal, a director of tax revenue and compliance, in an interview with Bloomberg said the Tax Office is mulling a plan to crack down on Instagram stars and merchants peddling goods and services over social media, a move which he said could bring an additional $1.2 billion into state coffers.
“Online marketplaces, daily deals, direct sales and endorsers are all subject to taxation if they have income to report,” Yon told Bloomberg.
Desperate times call for desperate measures, with Indonesia only collecting Rp 711.3 trillion ($54.3 billion) in total taxes, 46.2 percent of the Rp 1,539.2 trillion target as stated in the 2016 revised state budget.
Corruption
Ashtra Effendy, head of mothering community blog Haloibu, told the Jakarta Globe the community occasionally accepts brand sponsorship, which they include when declaring income tax.
“Brands that support us, always make sure we pay by giving us a paper sheet to sign and asking for our tax identification number [NPWP],” she said. Haloibu’s Instagram account is currently followed by 6,205 followers.
“I think most of [the so-called Instagram celebrities] do pay [tax], especially if they collaborate with big brands or company,” she said. “I mean why not? Tax are making the country better. The question is after we pay, does the government uses the money for the better?”
Ashtra’s cause is to reach out to new mothers anywhere in Indonesia — especially in remote areas where information is scarce — and deliver important information about motherhood, but she is hindered by poor internet connection in the country.
“The question is after we pay, does the government use the money for the better? […] I still read the news some of the people in the government still having corruption issues,” she said.
Yustinus Prastowo of local policy think tank Center for Indonesia Taxation Analysis (CITA) said the government must first be clear on the type of tax that can be imposed on Instagram and other social media users who endorse a product and then the government must also be clear about who should withhold the tax.
“The government can also collaborate with the payment gateways or the credit card issuers like Visa or MasterCard, meaning there must be a signed contract, registration and [the social media users] become a taxable entrepreneur,” Yustinus said.
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