The plan to apply digital taxation has been in the spotlight over the last several months, in line with the increasing challenges to explore the potential of the digital economy in the digital era.
For Indonesia, this is urgently needed to maximize taxes from the digital economy. Besides being based on enormous potential and the fact that digital taxes continue growing but have not thus far been collected, the huge need for fiscal expansion is also based on demands for justice because there are many digital players who have evaded paying tax.
For a number of people, the concept of digital taxation still causes confusion, even anxiety. It is understandable because this is relatively new, not only for Indonesia, but also for other countries.
The G-20 itself has not yet completed drafting international tax laws related to taxation norms and standards in the digital economy sector, especially those that can guarantee fair taxation among countries in the digital era, including preventing tax evasion efforts by digital giants that dredge gigantic profits from their economic activities in many countries, like Google and Facebook.
Our seriousness to optimize tax revenues from the digital economy, among others, is demonstrated by tax reform efforts, including preparing regulations, the restructuring of the Taxation Directorate General (DJP) to adjust to the demands of the digital era taxation regime, and making the handling of the digital economic transactions the DJP\'s priority project.
This is important because so far Indonesia has not benefited much from the rapid growth of the digital economy sector which, among other things, is reflected by 150 million internet users in 2018 and projected at 175 million by 2022. More than that, the rapid growth of e-commerce, with transaction values, is estimated at US$22.6 billion in 2022, from the US$8.6 billion at present, in line with the migration of conventional economy to the digital model.
Obstacles faced by the tax authorities to formulate the digital taxation scheme have been related to tax objects, who has the right to collect taxes, in addition to the complexity of the digital economy structure itself. Some obstacles have been overcome. The G-20, for example, has prepared a policy for the imposition of digital business tax without a requirement for the company\'s physical presence in the form of a permanent business entity.
Finance Minister Sri Mulyani is one of those who firmly said the government would collect taxes on digital service companies that earn income in Indonesia, with or without permanent business entities. So far, a permanent business entity has been a requirement to be determined as a taxable entrepreneur. We appreciate the progress made by the DJP in approaching a number of digital giants, such as Google. This is also expected to continue with other digital giants.
The digital age has become a challenge for the tax authorities in efforts of intensification, monitoring and tax auditing. Improvement in tax administration, legal rules, legislation, utilization of information technology and improvement of the management of taxation databases are inevitable.
No less important is the fact that taxes must be able to be a driving force for the economy. It means that the imposition of a digital tax should not even hamper the growth of the digital economy, as feared by digital economic actors.