By: Oryza Alir Artha
The digital era has transformed the global economy, and Indonesia is no exception. Indonesia’s digital economy is projected to reach US$146 billion by 2025, with digital tax revenues (including VAT on Electronic-Based Transactions or PMSE) already hitting IDR 34.91 trillion as of March 2025. This trend offers significant revenue potential for the state, but it also demands a tax framework that is responsive to the rapid innovations in digital services. The Directorate General of Taxes (DJP) at the Ministry of Finance has begun drafting new regulations to clarify taxation provisions for digital transactions. This step must be fully supported to ensure that Indonesia’s tax system does not lag behind the pace of digital economic growth.
Rosmauli, Director of Counseling, Services, and Public Relations at DJP, emphasized that the new regulations will define taxable digital services, collection mechanisms, and required documentation for digital businesses. Without a strong legal framework, both domestic and foreign businesses remain vulnerable to confusion regarding their tax obligations. Comprehensive regulations will not only clarify rights and responsibilities but also encourage voluntary compliance: when rules are transparent, businesses feel more confident that they won’t face arbitrary treatment during audits or tax inspections.
Although digital tax revenues are already significant, Ariawan Rahmat, Executive Director of the IEF Research Institute, highlighted that much potential remains untapped. He argued that the current appointment threshold for PMSE VAT collectors (IDR 600 million per year) is too high, leaving many small and medium digital players outside the tax net. Lowering this threshold would enable Indonesia to capture taxes from thousands of micro-digital businesses that are currently overlooked. IEF’s findings also point to four high-potential subsectors: crypto assets, P2P lending, the gig economy, and artificial intelligence (AI). Properly regulating these sectors with tailored rules could generate tens of trillions of rupiah in additional revenue annually.
To complement this reform, the government plans to introduce taxes on digital economic activities conducted through social media starting in 2026. Finance Minister Sri Mulyani Indrawati explained that content creators, influencers, and foreign OTT service providers (such as YouTube, TikTok, and Netflix) will be monitored via data from digital platforms. This strategy is not aimed at casual users but targets professional digital actors earning substantial incomes. By leveraging big data and AI technology, DJP can identify hidden tax potentials and broaden the digital taxpayer base.
However, regulation alone is insufficient. DJP has also launched Coretax, an integrated digital taxation system that combines AI and geotagging technology. Vincentius Sukamto, Head of Counseling at DJP East Java III Regional Office, explained that Coretax will simplify administration, improve data accuracy, and strengthen DJP’s knowledge management. With geotagging features for Taxpayer Identification Number (NPWP) registration, the data foundation will become richer, making it easier for DJP to map digital taxpayer compliance geographically.
Nonetheless, a major challenge remains: Indonesia’s digital and financial literacy levels are relatively low. INDEF data shows that digital literacy stood at just 62% in 2023, below the ASEAN average. Therefore, DJP must intensify its educational efforts, such as implementing Business Development Services programs for digital MSMEs. Through collaboration with universities, fintech associations, and tax centers, DJP can reach a wider range of businesses and instill a culture of tax compliance from an early stage.
Technological advancement has also created a new profession: the taxologist—tax consultants proficient in technology, data analytics, and digital regulations. Vaudy Starworld, Chair of IKPI, emphasized that tax consultants must adapt to technology and lead digital taxation innovations. The government needs to support this ecosystem through certification and specialized training in digital taxation, ensuring that tax reporting agents and advisors are ready to tackle the challenges of the digital economy.
Responsive and technology-based digital taxation regulations are no longer optional—they are a necessity. With a strong legal foundation, inclusive thresholds, utilization of social media data, Coretax digital infrastructure, and improved tax human resource capacity, Indonesia will be better positioned to optimize its digital economy potential. The government and all stakeholders—DJP, Ministry of Finance, fintech players, academics, and MSMEs—must work together. Only through such synergy can digital tax revenues support national development funding, strengthen the state budget, and ensure fair and sustainable economic growth in the Industry 4.0 era.
*) The author is a fintech practitioner.
