ID imposes VAT on e-money top-ups; Capital A, Google joins forces

By on April 8, 2022 0

Indonesia is set to impose VAT on e-money from May 1. Meanwhile, Malaysia’s Capital A digital travel platform announced a five-year strategic collaboration with Google Cloud.

Indonesia charges VAT on e-money

Indonesia is set to charge Value Added Tax (VAT) on e-money and digital wallet transactions from May 1, 2022.

According to a recently published regulation on income tax and VAT for fintech services, fees charged to consumers when they top up or withdraw their e-money balance from a third party are subject to 11% VAT.

“There’s nothing new about charging VAT for services, including fintech services, but we’ve put it in a new regulation because it overlaps with banking-type services…so we’re clarifying the things,” tax official Bonarsius Sipayung said in a streamed press briefing.

Sipayung gave the example of a customer topping up their e-money card and being charged 1,500 rupees for the service. VAT is applicable on Rs 1,500 instead of the amount recharged in e-money.

In addition to e-money, fees charged for bill payments, fund transfers and pay-after services in digital wallets are also subject to VAT.

The new regulations are part of a set of implementing regulations – which deal with very specific policies, touching on technicalities – to a far-reaching tax law passed by Parliament last year.

As part of the package, the Indonesian government is also introducing VAT on crypto asset transactions and an income tax on investment capital gains at 0.1% each.

Airasia Super App partners with Google Cloud

airasia Super App, Capital A’s digital travel and lifestyle platform, announced a five-year strategic collaboration with Google Cloud on Friday.

Together, the two companies are poised to nurture technology talent, co-create software tools and deliver more data-driven intelligence to small businesses, according to a statement.

“With the help of Google, our ecosystem will not only be transactional, but it will also be about building a community and enriching that community – not just customers, but also partners like restaurants, airlines, hotels and drivers. I’m going to enjoy the ride with Google,” said Tony Fernandes, CEO of Capital A.

As a result of this collaboration, airasia Super App and Google Cloud will establish a Cloud Center of Excellence (CCoE), which encourages product development and staff skill enhancement.

The collaboration will also ensure seamless access for airasia Super App users, even in rural areas with intermittent internet connectivity or with lower cost smartphones.

“What we are announcing today is just the beginning, and we look forward to exploring other co-innovation initiatives with Google, whether in digital travel planning, self-driving cars, games in the cloud, investments in startups or support for frontline workers through Google Workspace,” Amanda Woo, CEO of airasia Super App, said in the release.