Indonesia continues to refine its digital tax policies in 2025, focusing on Value Added Tax (VAT) for digital services and cryptocurrency transactions. These measures aim to ensure fair contributions from tech giants and to boost state revenue [1, 5, 11].
VAT on Digital Services
As of early 2025, Indonesia has collected Rp 26.18 trillion ($1.6 billion) in VAT from digital transactions over the past five years [5]. This revenue is sourced from major tech companies like Google, Meta, Microsoft, and Amazon [1, 5]. By February 2025, 211 digital businesses operating in Indonesia were designated as VAT collectors under the Electronic-Based Trading System (PMSE) [5, 6]. The VAT applies to a wide array of digital products and services, including streaming media, software, applications, and online advertising [1].
Tax on Cryptocurrency
Indonesia is also actively taxing cryptocurrency transactions. Since 2022, tax revenue from cryptocurrency has reached Rp 1.21 trillion ($74 million), with income tax on crypto sales contributing Rp 560.61 billion and VAT on crypto purchases totaling Rp 653.46 billion [5, 6].
VAT Rate Adjustments
Effective January 1, 2025, Indonesia increased its VAT rate from 11% to 12% [7, 10, 11]. However, an effective rate of 11% is maintained for most goods and services due to transitional provisions [7, 9]. Luxury goods remain subject to VAT at 12% [7, 9].
These ongoing efforts reflect Indonesia's commitment to adapting its tax system to the evolving digital economy, ensuring that both local and international businesses contribute to national development [5, 8].