Subsequent to a warning to slap $400 million tax bill, Indonesian authorities raided internet giant Google office in Jakarta over allegations of tax evasion.
The tax office is also planning to summon representatives from Google Indonesia's office who handles top posts at Google Asia Pacific.
Officials had reportedly visited Google's office in central Jakarta in the past two weeks to collect data and repeatedly sought meetings with senior company officials. However Google failed to cooperate with the authorities which led to the raid at Jakarta office.
Google reportedly paid less than 0.1 percent of the total income and value-added taxes it owed to the government in the last year. If found guilty, the company would have to pay four times of the original tax amount amounting to a total of up to 5.5 trillion rupiah ($418 million) for 2015 alone.
Alongside, the Indonesian authorities are also planning to seek five years of back taxes in order to penalise the global tech giant.
However, Google has cited third party report, a joint study by Google and Singapore state investor Temasek released earlier this year, which estimated the size of Indonesia's digital advertising market at $300 million only.
Google has issued a counter statement saying that the amount produced by the Indonesian tax department is not based on reality.
Indonesia is under pressure to collect more tax revenue. Last year the nation suffered its worst tax-revenue shortfall in over a decade. Thus, the government is stepping up efforts to collect more taxes from the internet companies to meet the annual target.
Meanwhile, the country is also planning to block websites of tech companies who are avoiding tax.
The country is asking internet companies to set up permanent local entities for tax purposes since April 2015.
