Maintaining Fiscal Fairness in 'Micro Drama' Digital Services

The phenomenon of the digital economy often develops faster than the ability of regulation to keep pace. One of the latest examples is the rise of Chinese micro drama streaming services, which now reach millions of internet users in Indonesia. These short-duration shows with fast-paced plots and a pay-per-episode business model have captured public attention, particularly among the younger generation seeking instant entertainment amidst their busy daily activities. However, behind this rapid popularity, an issue has emerged that has not yet been widely discussed. Some micro drama services do not operate through official digital platforms that have been appointed as collectors of Value Added Tax (VAT) on Trade Through Electronic Systems (PMSE). Instead, they are distributed via constantly changing links. Payments are made through QRIS or various digital wallets, directing funds to recipient accounts where the identities of the business actors and beneficial owners are difficult to verify. On the other hand, the Government has built an increasingly robust digital economy taxation regime. As of March 2026, the Directorate General of Taxes (DJP) has appointed 262 PMSE business actors as VAT collectors, with 231 of them having remitted PMSE VAT. From this policy, PMSE VAT receipts have reached Rp38.76 trillion, or nearly 77 percent of the total digital economy tax revenue of Rp50.51 trillion, which also comes from crypto tax, fintech, and the Government Procurement Information System (SIPP). This achievement shows that the PMSE VAT mechanism is effective when transactions take place through platforms with clear legal and administrative identities. Conversely, the nomadic link-based distribution model lies outside this administrative chain, allowing economically valuable transactions to occur without leaving an adequate tax trail. Amid the rapid growth of Indonesia’s digital economy, which is estimated to remain the largest in Southeast Asia, this condition has the potential to create a new tax gap, namely the disparity between the tax potential that should be collected and the actual state revenue. If this grey area continues to be tolerated, the problem is not merely the loss of potential VAT, but also the creation of horizontal injustice, as compliant digital business actors who collect and remit VAT must compete with informal service providers operating outside the state’s supervisory system. In recent years, the government has demonstrated quite significant success in collecting taxes from global digital companies. Various streaming platforms, marketplaces, and cross-border digital service providers have been appointed as PMSE VAT collectors. However, this success was built on the assumption that business actors can be clearly identified. As business models shift towards more informal and anonymous operations, a new challenge emerges that requires a different approach.