Finance Ministry Outlines Three Digital Tax Challenges

JAKARTA – Indonesia’s Finance Ministry identified three primary challenges that tax authorities worldwide face in taxing the digital economy. The briefing was given by Senior Tax Policy Expert Iwan Djuniardi during the komPak forum on 4 November 2025.

The first challenge is nexus, the lack of a physical presence to establish tax jurisdiction. The second involves valuing profits and preventing base erosion and profit shifting, because digital business models rely heavily on intangible assets. The third concerns tax administration, as digital transactions occur at massive scale and require automated, cross‑agency data integration.

The ministry is drafting a Foreign Digital Transaction Tax Collection System (SPPT DLN) that would appoint digital platforms to withhold and remit tax under the Tax Collection Law. The aim is to improve compliance, fairness and fiscal revenue. The komPak initiative seeks input from academics, practitioners and businesses to shape concrete regulatory recommendations.