Indonesia to tax social media giants

Indonesian finance minister Bambang Brodjonegoro recently announced that all internet-based services will be required to pay local taxes and obtain “permanent establishment” status. The latter can be in the form of either a representative office or full-fledged company. He compared the arrangement to that already shared by Indonesia and contractors in the oil sector.

A legal decree on the matter is expected by month’s end. After a likely transition period, the government said, it will block internet services that don’t comply, or reduce their bandwidth.

Indonesia has the fourth-largest population in the world, with over 260 million people, and Indonesians tend to adopt social media with gusto. Social media is huge worldwide and has lead to huge changes in the marketing industry, and a multitude of other companies that provide products to make your social media experience more multi-dimensional, for example you can use an instagram feed planner to organise your posts. It’s about time social media giants start paying a little back. Some 89% of adult internet users (or smartphone owners) use social networking, according to the Pew Research Center, well ahead of the US, Japan, and Germa