Digital Economy Worth Rp 487 Trillion: Where Are the Taxes?

I have a friend, let us call him Hendra. He works for a private company on a regional minimum wage. Every month, his tax is deducted automatically, without loopholes and without compromise. One day, Hendra stumbled upon his neighbour’s online shop during a TikTok live session. The estimated turnover reached hundreds of millions of rupiah per month. But when Hendra asked about taxes, the neighbour simply replied, ‘What tax?’ This story is not just an anecdote. It captures the stark inequality in our taxation system, a condition that ultimately explains why the national tax ratio target consistently falls short of expectations. Every time the tax target is missed, the answer is always the same: intensification. Audits are tightened, warning letters are sent en masse, and penalties are reinforced. The target, however, never changes. Formal sector taxpayers are always in the crosshairs because they are the easiest to reach and have the fewest options. Ironically, this outdated strategy has failed to boost overall revenue. According to data from the Central Statistics Agency and the Ministry of Finance, Indonesia’s tax ratio in 2024 reached only 10.08 percent of Gross Domestic Product, down from 10.31 percent the previous year. This figure lags far behind Thailand, which has surpassed 17 percent, or Vietnam at 16.8 percent. The low ratio is understandable because the state allows a dark space called the shadow economy to operate without oversight. The Financial Transaction Reports and Analysis Centre estimates its value at around 8 to 10 percent of GDP. This means an economy worth thousands of trillions of rupiah moves every day, almost untouched by the tax system. This is the great paradox: compliant taxpayers are squeezed, while those who should share the burden are never touched. This outdated pattern not only wounds the sense of justice but will never succeed as long as the state neglects the potential in the digital realm. The digital space is like a market crowded with millions of transactions daily, yet its tax booth sits empty. The e-Conomy SEA 2024 report compiled by Google, Temasek, and Bain & Company notes that the value of Indonesia’s digital economy reached 90 billion US dollars in 2024, the highest in Southeast Asia. Meanwhile, Bank Indonesia recorded that national e-commerce transactions in the same year penetrated Rp 487.01 trillion, growing 7.3 percent from the previous year. This is not a small figure, but its contribution to tax revenue does not yet reflect its true scale. The scale becomes even more undeniable when looking at payment traffic. Bank Indonesia noted that QRIS users reached 55 million people by the end of 2024 and continued to surge to 57 million users by mid-2025. This sector is no longer a fringe economy; it is a large-scale business ecosystem comprising sellers on Shopee and Tokopedia, content creators with hundreds of thousands of followers, and modern service providers whose transactions flow entirely through digital wallets. The minimal tax contribution from this ecosystem is often not due to bad intentions. Many simply do not understand their obligations or feel the system is too complicated. That is why the required approach is not merely enforcement, but structuring: expanding the tax base in a way that is fair, clear, and easy for anyone to follow. The government is not idle. There are three instruments now serving as pillars, each with a distinct role. The first weapon is Coretax. This system integrates data from third parties, including marketplaces, payment platforms, and QRIS transactions, directly to the desk of the Directorate General of Taxes. Through Coretax, the state no longer relies solely on taxpayers’ self-reporting. The data will speak for itself. Once the data is transparent, the second instrument executes the collection. This is where Finance Minister Regulation Number 37 of 2025 plays its role by appointing other parties, including marketplaces, as tax collectors on income from transactions by merchants on their platforms. This step is tactical because collection occurs right at the point where money circulates. Then, what about giant players who often shelter behind small business status? To plug this gap, a third instrument exists: Government Regulation Number 20 of 2026. If Coretax and the ministerial regulation pull the digital economy into the tax system, this government regulation ensures that large-capacity entities can no longer enjoy the cheap 0.5 percent tax facility meant for micro, small, and medium enterprises. These three instruments weave a new compliance ecosystem that forces activity in the grey zone to transition towards fiscal justice. However, weapons on paper are different from weapons that are actually fired. The obligation for marketplaces to collect tax, for instance, was once postponed until early 2026 and then extended further to wait for purchasing power recovery. No matter how sophisticated the regulation, it will remain a paper tiger if execution is continuously withheld. Moreover, the sophistication of legal instruments and technology is not enough. Tax ultimately deals with humans, and one crucial determining factor often overlooked is trust. Economist Benno Torgler has shown that people’s willingness to pay taxes depends heavily on their belief that the money will be managed properly, a concept known as tax morale. Similarly, Erich Kirchler reminds us that compliance grown from trust is far more sustainable than compliance planted through the threat of sanctions. So, how to foster that trust? The answer lies not in slogans, but in evidence. Expanding the digital tax base will only bear fruit if the public feels the direct reciprocity: better schools, reliable community health centres, and roads no longer riddled with potholes every rainy season. Without concrete proof, every effort at extensification will only produce new ghosts: the tax potential is enormous on the spreadsheet, but the cash register remains empty.