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View all search resultsGovt: SPP-TDLN complements digital VAT collection, not new or double taxation
Under the mechanism, the government seeks to expand the existing tax base, potentially doubling the current figure of Rp 8 trillion (US$454 million) to 12 trillion.
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(Courtesy of Jalin)
A
s the Tax Collection System for Offshore Digital Transactions (SPP-TDLN) took effect on Sept. 10, the government is seeking to clarify that the system is meant to complement existing mechanisms for collecting value-added tax (VAT) on digital goods and services sold through electronic systems as opposed to double-taxing or imposing a new tax for consumers.
In a joint meeting with Commission XI of the House of Representatives (DPR) on Sept. 7, Tax Director General Bimo Wijayanto said the VAT is part of the government’s efforts to expand the tax base within Indonesia's digital economic ecosystem.
"We will also expand the existing tax base regarding digital platform players operating in Indonesia - specifically marketplaces with Indonesian consumers," he said.
Bimo also noted that the policy has the potential to significantly boost tax revenue from digital trade.
"We are confident that implementing the VAT will increase the tax base by nearly twofold; we hope to double the current figure, which stands between Rp 8 trillion and Rp 12 trillion, from digital trade."
The system, which was established under Presidential Regulation No. 68/2025, is operated by state-owned enterprise (SOE) PT Jalin Pembayaran Nusantara.
As the appointed VAT system operator, Jalin acts as the infrastructure enabler connecting the taxation mechanism with participating payment institutions. The company is responsible for preparing and operating the system - including conducting trials, ensuring system reliability and security, providing technical support and maintenance and complying with all applicable laws and regulations.
A fairer taxation mechanism
Prior to the implementation of the VAT, the Directorate General of Taxation designated certain foreign digital service providers to directly collect VAT for transactions conducted through these providers.
However, not all cross-border digital transactions take place through business operators designated as VAT collectors, which the SPP-TDLN mechanism addresses by leveraging Indonesia’s payment system infrastructure.
Currently, the SPP-TDLN’s initial implementation has been rolled out through state-owned banks (Himbara) as a preliminary phase based on technical readiness. In the long run, the mechanism will be gradually expanded to other financial institutions.
Under Finance Ministry Regulation No. 49/2026, neither banks nor nonbank institutions automatically qualify as SPP-TDLN collectors. Issuers must undergo stages involving development, stabilization, interconnection testing, system security verification, as well as formal designation before they can perform collection functions.
“We have tested dozens of banks. Himbara will begin operations soon. Subsequently, we will implement the system across other banks in stages,” Finance Minister Purbaya Yudhi Sadewa said on Sept. 8.
The government also conducted a sandboxing (system testing) process prior to implementation. According to Purbaya, the four state-owned banks completed this stage as the initial group for the rollout.
At the same time, in the run up to the implementation of the SPP-TDLN, concerns have arisen over whether transactions on which VAT has already been collected are subject to a second round of collection through the SPP-TDLN mechanism.
Article 5 paragraph (1) of Finance Ministry Regulation No. 49/2026 explicitly distinguishes the scope of collection via SPP-TDLN from transactions where VAT has already been collected by government-appointed PMSE business operators.
In addition, the regulation stipulates that the SPP-TDLN is not a new type of tax, nor does it create an additional VAT rate. The subject remains the consumption of digital goods and services from abroad, which are subject to VAT under tax regulations.
The government’s position is that the SPP-TDLN mechanism is necessary as manual, appointment-based collection methods face limitations, particularly when dealing with massive digital transaction volumes and relatively low transaction values.
Iwan Djuniardi, expert staff for tax regulations and law enforcement at the Finance Ministry, stated that leveraging technology was essential because the previous mechanism was not fully capable of creating a level playing field for digital economy taxation.
Meanwhile, the Indonesia Fintech Association (AFTECH) has also expressed that the implementation of the SPP-TDLN system can help establish a level playing field between domestic business players and foreign digital service providers.
