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Economy

Indonesia makes foreign digital companies pay local taxes

Government tries to balance spending to spur growth and boosting coffers

Google now faces having to pay domestic taxes in Indonesia which has just ruled that foreign digital companies with a large presence in the country must be treated as local entities.    © Reuters

JAKARTA -- Overseas digital companies that have a significant presence in the Indonesia market, such as Google and Facebook, will have to pay all relevant local taxes, Jakarta revealed on Wednesday.

The new regulation comes at a time when countries are grappling with how best to tax international technology companies that often pay little tax in the jurisdictions they operate in despite their significant presence.

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