Indonesia is drafting a new regulation to tackle its “shadow economy,” making changes to how sellers and platforms operate across the booming online shopping sector.The rule would require e-commerce platforms to collect and remit part of sellers’ sales income to the government, the country’s tax office said.Reuters had earlier reported that the plan involved a directive that the platforms must withhold a 0.5% levy on sales made by small and medium-sized sellers. Although the tax office did not announce a timeline, the rule could come into effect as early as next month, as per sources cited by the agency.“The rule is still in the works and will be announced and explained to the public after,” the tax office said, adding that platforms and stakeholders have been consulted and have so far indicated support.However, Indonesia’s e-commerce association, idEA, urged caution. While agreeing to comply with government policy, the group also highlighted the need for a phased implementation to avoid disrupting the operations of millions of sellers.The upcoming changes are expected to impact major online marketplaces, including TikTok Shop and Tokopedia (run by ByteDance), Shopee (Sea Ltd), Lazada (backed by Alibaba), Blibli, and Bukalapak. According to one source, penalties for late reporting are also being considered.ByteDance, which operates Tokopedia is home to around 12 million sellers and with a transaction value of 249 trillion rupiah ($15.3 billion) in 2023, called for a realistic adjustment period.“We hope its implementation takes into account the need for adequate preparation time for various aspects. This includes the technical readiness of platforms and the capacity of sellers, especially small and medium-sized enterprises, to comply,” TikTok stated.The tax office clarified that the levy is aimed at improving oversight of vendors who operate outside the tax system, often due to the perceived complexity of filing requirements. Indonesia’s e-commerce sector continues to boom, with its gross merchandise value projected to more than double from $65 billion in 2023 to $150 billion by 2030, according to a report by Google, Temasek and Bain & Co.