Indonesia Hoping for Tax Settlement With Google, Finance Minister Says

 By Ben Otto 
 

JAKARTA, Indonesia--Indonesia is trying to settle a tax dispute with Alphabet Inc.'s Google unit and will treat the case professionally, Indonesian Finance Minister Sri Mulyani said Thursday.

"We've already communicated with Google. At least there's an understanding about why Indonesia would like to have [a] fair share of the revenue," Ms. Mulyani told journalists in Jakarta. "We do hope that we are going to have a settlement."

"I would like to give the assurance" that Indonesia will give Google opportunity to examine the case, she added. "I'm going to make sure that our team is going to treat this issue professionally."

"This has nothing to do with whether [it's] criminal or non-criminal," she added without elaborating.

Indonesia's tax agency last month said it planned to bill Google up to $380 million in back taxes and fines that it said the search giant owes from 2015, and that the agency would also pursue taxes as far back as 2011, when Google first established a presence in Southeast Asia's largest economy.

Google has said it has paid all applicable taxes in Indonesia, and that it is cooperating with the government.

Google and Facebook collected 70% of Indonesia's total digital advertising revenue of $830 million last year, according to Indonesian authorities, and the government has been pressing for more tax revenue from the business for several months. Indonesia is struggling to meet its tax-collection target of $117 billion this year to help fund President Joko Widodo's plans to build up the ports and roads he says Indonesia needs to become more competitive.

Indonesia's move also comes amid growing scrutiny into the tax affairs of big-name tech firms. In late August, the European Union's antitrust regulator demanded that Ireland recoup roughly $14.5 billion of unpaid taxes accumulated over more than a decade by Apple Inc., saying that rules prohibit government from helping companies gain advantages over their competitors.

--Resty Woro Yuniar contributed to this article.

Write to Ben Otto at [e-mail]

(END) Dow Jones Newswires

October 27, 2016 05:18 ET (09:18 GMT)

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