Jakarta. Indonesia's tax authority said on Monday that sellers on e-commerce platforms should not raise prices because of a new tax collection mechanism, stressing that the policy does not introduce a new tax but only changes how existing obligations are collected.

The Directorate General of Taxes (DJP) said the new system, which will take effect on Aug. 1 after a one-month transition period, requires designated online marketplaces to collect a 0.5% Article 22 income tax on behalf of merchants with annual sales exceeding Rp 500 million ($27,900).

"There should be no issue of price increases because of the tax deduction. There shouldn't be any," DJP spokesperson Inge Diana Rismawanti said at a public discussion in Jakarta.

She said the obligation to pay income tax already applies to businesses regardless of whether sales are conducted online or offline, adding that the new mechanism only changes the method of collection.

The tax authority has also asked the Indonesian E-Commerce Association (idEA) to ensure marketplaces do not impose additional fees on sellers as a result of implementing the policy.

To improve understanding of the new rules, the DJP is conducting outreach throughout July with business groups, including idEA and the Indonesian Employers Association (Apindo), while encouraging marketplaces to hold direct discussions with merchants.

Earlier this month, the tax authority appointed four major e-commerce platforms—Tokopedia, Shopee, Lazada and Blibli—to collect the tax on behalf of eligible sellers. Consumers will continue paying for purchases as usual, while marketplaces will deduct the tax from merchants' gross sales, remit it to the government and report it through the tax system.

Tax Director General Bimo Wijayanto said the policy is expected to improve tax compliance and strengthen the accuracy of taxpayer data in the government's Coretax system.

Indonesia's tax revenue reached 834.4 trillion rupiah ($46.3 billion) by the end of May, up 22.1% from a year earlier. Despite the strong growth, the Finance Ministry still projects a modest shortfall from its 2,357.7 trillion rupiah full-year revenue target.