Indonesia's Directorate General of Taxes has clarified that the upcoming digital tax initiative will not impose Value-Added Tax (VAT) on personal bank transfers or public remittances, following public concerns over the policy scheduled to take effect on November 9, 2026 (02/11).

The clarification was issued on Monday, November 2, 2026, after remarks by presidential envoy Hashim Djojohadikusumo raised concerns that banks, financial technology companies, and e-commerce platforms would face broader digital tax collection.

Inge Diana Rismawanti, Director of Dissemination, Service, and Public Relations at the Directorate General of Taxes, explained that the November 9 initiative specifically concerns the Foreign Digital Transaction Tax Collection System, known as SPP-TDLN.

The system is intended to organize VAT collection on eligible cross-border digital transactions. It does not introduce a new tax or change existing VAT rates, according to the tax authority.

Indonesia Digital Tax Will Not Target Personal Bank Transfers

In an official written statement released on Monday, Inge said the SPP-TDLN system was designed to provide certainty, prevent double taxation, and ensure equal treatment between domestic and foreign businesses.

"This policy is not a new tax, so it does not alter VAT rates and is not intended to collect tax on all foreign transactions," Inge said.

She also emphasized that ordinary bank transfers and personal remittances would not automatically become subject to VAT under the initiative.

"The system is not intended to impose VAT on personal fund transfers or public remittances," Inge said.

According to Inge, the system will focus on eligible cross-border digital transactions and prevent VAT from being collected twice on the same transaction.

"SPP-TDLN is designed to prevent double taxation. If VAT on an offshore digital transaction has already been collected by an appointed electronic commerce operator, that transaction will not be collected again through SPP-TDLN."

The tax authority also stated that data usage under the system would be conducted securely, restrictively, and in accordance with applicable regulations.

Hashim's Rp 1,500 Trillion Tax Gap Warning Sparks Public Concern

The clarification followed remarks by Hashim Djojohadikusumo during the 2026 National Leadership Meeting of the Indonesian Chamber of Commerce and Industry (Kadin) in Jakarta on October 29, 2026 (29/10).

Hashim, who serves as Kadin's Advisory Board Chairman and a Special Presidential Envoy, said Indonesia faced an estimated Rp 1,500 trillion shortfall in uncollected tax revenue, equivalent to approximately US$95 billion.

"We are currently facing an uncollected tax gap of Rp 1,500 trillion," Hashim said during the meeting.

He compared Indonesia's tax collection performance with Cambodia, which has a tax-to-GDP ratio of 18%, against Indonesia's estimated ratio of 10% to 11%.

"If our law enforcement apparatus, the Directorate General of Taxes, and Customs and Excise worked as they should, like the Cambodians, we would have a budget surplus of Rp 900 trillion this year," he said.

Hashim also criticized the performance of Indonesia's tax enforcement institutions.

"Indonesia is not weak; it is the apparatus that has been weak. We must streamline and push them forward," he added.

Digital Tax Collection Scheduled for November 9

During his speech, Hashim said the government planned to strengthen tax collection through digital taxation, involving financial institutions and digital platforms.

"What is known as digital taxation will be implemented immediately on November 9, 2026," Hashim said.

He identified state-owned lenders, private banks, financial technology operators, and major e-commerce platforms, including Shopee, Lazada, and GoTo, as entities expected to withhold and deposit outstanding tax liabilities.

However, the Directorate General of Taxes clarified that the November 9 initiative specifically concerns SPP-TDLN and does not establish VAT on all foreign transactions or personal money transfers.

Indonesia Digital Tax Revenue Reaches Rp 58.75 Trillion

Indonesia's digital tax collection reached Rp 58.75 trillion between January and September 2026, according to the Directorate General of Taxes. September alone contributed Rp 1.52 trillion.

The revenue came from four main sectors: electronic commerce, cryptocurrency assets, financial technology lending services, and government procurement transactions processed through the Government Procurement Information System (SIPP).

Director General of Taxes Bimo Wijayanto said the figures reflected the growing contribution of digital economic activities to state revenue.

"The Directorate General of Taxes continues to push for tax compliance across the digital economy by broadening the collection base and conducting sustainable supervision," Bimo said.

He added that the initiative was expected to increase state revenue while maintaining equal tax treatment between digital and conventional businesses.

E-Commerce and Cryptocurrency Contributions

Appointed electronic commerce operators, known as PMSE providers, contributed Rp 9.54 trillion between January and September 2026.

This brought cumulative PMSE tax revenue since 2020 to Rp 45.21 trillion.

Meanwhile, cryptocurrency transactions generated Rp 300.28 billion during the first nine months of 2026. Cumulative cryptocurrency tax collections since 2020 reached Rp 2.18 trillion.

Fintech and Government Procurement Revenue

Peer-to-peer lending and other financial technology services contributed Rp 989.53 billion in tax revenue during January-September 2026.

Their cumulative contribution since tax enforcement began reached Rp 5.4 trillion.

Government procurement transactions processed through SIPP generated another Rp 1.89 trillion during the same period.

Indonesia's Low Tax-to-GDP Ratio Drives Digital Tax Expansion

Indonesia's efforts to strengthen digital tax collection come amid relatively low tax revenue compared with the size of its economy.

According to the OECD's Revenue Statistics in Asia and the Pacific 2026 report, Indonesia's tax-to-GDP ratio stood at 11.8% in 2024.

The figure placed Indonesia third from the bottom among 38 surveyed Asia-Pacific jurisdictions, ahead of only Timor-Leste and Bangladesh.

Indonesia's ratio was also below the Asia-Pacific average of 19.7% and the OECD average of 34.1%.

The report also recorded Indonesia's tax revenue per capita at US$1,969 in 2024, comparable to several Pacific island nations.

The government is seeking to increase revenue collection to support spending priorities under President Prabowo Subianto's administration, including food defense, domestic downstream industrial development, and national infrastructure.

Through systems such as SPP-TDLN, the government is directing tax enforcement toward cross-border digital services and technology-based compliance.

The Directorate General of Taxes has stated that the initiative is intended to strengthen VAT collection on eligible digital transactions while preventing double taxation and maintaining equal treatment between domestic and foreign businesses.

PHOTO: MAGNIFIC

This article was created with AI assistance.

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