PMK 37/2025 Requires Marketplace to Withhold PPh 22 for UMKM

The Indonesian government issued Treasury Regulation No. 37 of 2025, promulgated on 14 July 2025, designating online marketplaces as collectors of Income Tax Article 22 (PPh 22) on e‑commerce transactions by micro, small and medium enterprises (UMKM). The rule was released while Sri Mulyani Indrawati served as Finance Minister.

The PPh 22 rate remains at 0.5 % for UMKM with annual turnover above Rp500,000, and businesses below that threshold are exempt provided they submit a statement letter. Integration with marketplace systems eliminates manual tax‑withholding documents, yet UMKM lacking a Tax Identification Number (NPWP) or digital‑administration experience may still encounter difficulties.

The regulation aims to boost tax compliance, improve transaction transparency, and give legal certainty to e‑commerce actors. Its impact will depend on marketplaces’ system adjustments and on effective education for UMKM to leverage the simplification without incurring excessive administrative burden.