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Indonesia's Digital Tax Revenue Continues to Rise, Government to Explore Other Digital Economy Tax Revenue Potentials

As of August 31, 2024, the government recorded revenue from the digital economy sector amounting to IDR 27.85 trillion. This total comes from the collection of Value Added Tax (VAT) on Trade Through Electronic Systems (PMSE) amounting to IDR 22.3 trillion, crypto taxes amounting to IDR 875.44 billion, fintech (P2P lending) taxes amounting to IDR 2.43 trillion, and taxes collected by other parties on transactions for the procurement of goods and/or services through the Government Procurement Information System (SIPP taxes) amounting to IDR 2.25 trillion.

Meanwhile, by August 2024, the government had appointed 176 PMSE businesses as VAT collectors. This number includes two new VAT collectors and one correction or data amendment for a previously appointed VAT collector. In August 2024, the new appointments were THE World Universities Insights Limited and Cloudkeeper (Singapore) PTE. LTD. The correction in August 2024 was for Freepik Company, S.L.

Of all the appointed collectors, 166 PMSE entities have collected and deposited a total of IDR 22.3 trillion in VAT PMSE. "This amount includes IDR 731.4 billion collected in 2020, IDR 3.90 trillion in 2021, IDR 5.51 trillion in 2022, IDR 6.76 trillion in 2023, and IDR 5.39 trillion in 2024," said Dwi Astuti, Director of Education, Service, and Public Relations, as quoted from the tax authority's press release.

Crypto tax revenues have reached IDR 875.44 billion by August 2024. These revenues include IDR 246.45 billion collected in 2022, IDR 220.83 billion in 2023, and IDR 408.16 billion in 2024. Crypto tax revenues consist of IDR 411.12 billion from income tax (PPh 22) on crypto sales transactions at exchanges and IDR 464.32 billion from domestic VAT on crypto purchases at exchanges.

Fintech (P2P lending) taxes have also contributed IDR 2.43 trillion in tax revenue by August 2024. These fintech tax revenues include IDR 446.39 billion collected in 2022, IDR 1.11 trillion in 2023, and IDR 872.23 billion in 2024. These fintech taxes consist of IDR 765.27 billion in income tax (PPh 23) on interest received by domestic taxpayers (WPDN) and permanent establishments (BUT), IDR 354.2 billion in income tax (PPh 26) on interest received by foreign taxpayers (WPLN), and IDR 1.31 trillion in domestic VAT.

Other digital economy tax revenues come from SIPP tax collections. By August 2024, SIPP tax revenues amounted to IDR 2.25 trillion. This includes IDR 402.38 billion collected in 2022, IDR 1.12 trillion in 2023, and IDR 726.41 billion in 2024. SIPP tax revenues consist of IDR 152.74 billion in income tax (PPh) and IDR 2.09 trillion in VAT.

"To create fairness and a level playing field for both conventional and digital businesses, the government will continue to appoint PMSE businesses that sell products or provide digital services from abroad to consumers in Indonesia," said Dwi.

Dwi added that the government will continue to explore other potential tax revenues from digital economy businesses, such as crypto taxes on cryptocurrency asset trading transactions, fintech taxes on loan interest paid by borrowers, and SIPP taxes on transactions for the procurement of goods and/or services through the Government Procurement Information System.

IN