Indonesia Tax Authority Measure on Facing the Challenge in Taxing Digital Economy

Abstract

This article is intended to examine the challenges of taxing digital economy due to rapid development of technology in Indonesia. Those changes should be responded equally from the government perspective pertaining to the changes in tax regulation, structure/institutional of tax organization, human resources who understand the pattern and development of digital business and have capability to formulate tax regulation suitable for the business pattern, and information technology reliable in transforming the business of the tax organization. This study occupies constructivism paradigm and qualitiative research method. The data was gathered through literature review, documentation study and interview with informant. The research showed that for all of those aspects, the Indonesian government has realized that the change is very crucial. The government of Indonesia also fully realizes that the rapid development of the economic activities and should respond it by publishing various proper regulations and initiatives. However, some of the regulations are still insufficient to respond to the existing challenges. This indicates that in reality, the government is still unable to respond to the current dynamic properly and proportionally. Organization changing on the context of bureaucracy reform also still on the progress, similarly on the development of human resources capacity and the use of technology to optimize tax collection effort. Therefore, more comprehensive improvement through engagement of various agents to properly respond to the current economic development is essentially required.