Telecoms tax troubles in Indonesia and Syria

Telecoms tax troubles in Indonesia and Syria

Two news stories related to the ever-topical subject of taxation of service providers have recently emerged: in Indonesia a new tax is about to be imposed, while in Syria an unpaid tax is being pursued.

The Indonesian finance ministry has been reported as instituting a new regulation taxing over-the-top (OTT) services. More precisely, the government of Indonesia seems to be ready to charge a 10 percent value-added tax on the sale of digital products and services from 1 July 2020.

This, according to a report in Reuters, will apply to digital products sold by non-domiciled internet companies “with a significant presence in the Indonesian market, including streaming services, applications and digital games”. How Spotify and Netflix, said to be among the companies targeted, will respond remains to be seen.

By contrast, SyriaTel should perhaps not be surprised at the Syria Telecommunications Regulatory Authority’s (SyTRA) warning that it will take “all legal measures” to collect back taxes it claims the operator owes.

The company has already missed a deadline for arranging a mechanism for the payment, and, along with rival provider MTN Syria is said to owe a total of $1.09 billion in back taxes related to licence fees. 

MTN, however, is in the process of negotiating a mechanism for the payment of the owed amount; SyriaTel has yet to do so.

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