Indonesia's Digital Tax Revenue Still Below Optimal Potential, Celios Reports
The Center of Economics and Law Studies (Celios) has recorded that the contribution of tax revenue from the digital sector in Indonesia is still not commensurate with the significant role of the digital economy in the national economy. This is reflected in the Tax Coefficient Digital value, which only reached 0.274 in 2024. “Indonesia’s digital tax is still below its optimal potential; the digital tax structure is not yet proportional to the scale of the digital economy. Many digital activities remain unrecorded or beyond the reach of the taxation system,” said Celios Director Bhima Yudhistira in a study document on Over The Top Industry Governance in Indonesia, dated 3 July 2026.
The Tax Coefficient Digital is a ratio used to measure the effectiveness of the digital sector’s tax contribution to the digital economy. This indicator is calculated by comparing the proportion of digital tax to total tax revenue with the proportion of the digital economy’s gross merchandise value (GMV) to gross domestic product (GDP). Based on 2024 data, tax revenue from the digital economy reached Rp32.32 trillion, out of a total tax revenue of Rp1,932.4 trillion. Meanwhile, the digital GMV was recorded at Rp1,350 trillion, while the GDP at current prices reached Rp22,139 trillion.
Calculations show that the ratio of digital tax to total tax revenue is 0.0167 or about 1.7 percent, meaning digital tax contributes 1.7 percent of total tax revenue. Meanwhile, the ratio of digital GMV to GDP is 0.061 or 6.1 percent, indicating that the digital economy contributes 6.1 percent to the national GDP. From these two ratios, the Tax Coefficient Digital value is obtained at 0.274. This value shows that every one unit of the digital economy’s contribution to GDP only generates about 0.27 units of tax contribution compared to the average of other economic sectors.
The study explains that revenue from the digital sector is an alternative source of state revenue that is currently part of the international fiscal policy discourse. This policy is aimed at optimising state revenue from large-scale digital companies or multinational enterprises (MNEs). In its development, digital revenue can come from tax instruments as well as non-tax revenue. The implementation of digital taxation policies in various countries also varies, including direct taxes such as digital VAT, indirect taxes, and tax mechanisms based on global consensus through OECD and United Nations schemes.
Under the OECD Pillar Two scheme, the potential for digital tax revenue is calculated by considering several criteria. The provisions apply to companies with global revenues of at least €750 million per year (approximately Rp13 trillion), subject to a global minimum tax of 15 percent, with global net profits of at least Rp10 trillion, and earning revenue in Indonesia of at least Rp500 billion. Companies that have been subject to the global minimum tax are no longer subject to progressive digital tax. The potential tax revenue is estimated to come from large-scale digital companies operating in Indonesia. The scheme also regulates progressive additional tax rates based on the size of the company’s net profit in Indonesia. Companies with net profits up to Rp100 billion are not subject to an additional rate (0 percent). For net profits above Rp100 billion to Rp500 billion, an additional rate of 3 percent is imposed; for net profits above Rp500 billion to Rp1 trillion, a rate of 5 percent; and for net profits above Rp1 trillion, an additional rate of 7 percent is applied.
Meanwhile, the UN Convention on Digital Tax provides a legal basis for source countries to impose tax on income from digital services. Through Article 12B, the country where the users or customers are located obtains the right to tax income from digital services provided by foreign companies. This provision is intended as a solution to the challenges of taxing the digital economy, which previously tended to favour the country of the company’s domicile. In the provisions regarding automated digital services (ADS), the tax object includes various digital services provided automatically through technology, such as digital advertising platforms, streaming services, marketplaces, and algorithm-based cloud services. The taxation mechanism is carried out through withholding tax on gross revenue, which is expected to simplify tax administration, especially for developing countries.