Social Media Tax Part of Indonesia’s 2026 Tax ReformIndonesia plans to introduce a social media tax in 2026 as part of its broader strategy to expand state revenue through digital economic channels. The Ministry of Finance confirmed this move in line with increasing digital transactions and monetized online activity.
“We will begin identifying potential tax sources from social media and digital data to support the 2026 state budget revenue targets,” said Finance Minister Sri Mulyani Indrawati in Jakarta on July 14, 2025.
Government Targets Digital Economy Growth
The government sees the digital economy as a rapidly expanding sector that has yet to be fully integrated into the national tax system. Platforms such as YouTube, Instagram, TikTok, and Netflix have enabled many Indonesians to earn significant online income, often untaxed.
During a parliamentary meeting with Commission XI, Deputy Finance Minister Anggito Abimanyu emphasized the urgency of tapping into this potential. “First, we’ll explore tax potential through data analytics and social media,” he stated. This marks a shift in tax collection strategy to better reflect Indonesia’s evolving economy.
How the Social Media Tax Will Work
The social media tax will apply to specific digital actors who generate income through online platforms. These include content creators monetizing their videos, influencers receiving paid endorsements, and foreign companies offering digital services in Indonesia.
The Directorate General of Taxes plans to utilize open-source data and digital monitoring tools to detect income streams currently outside the tax net. According to Sri Mulyani, “The digital economy is growing rapidly and must be included in the tax system to ensure fairness and equity.”
Authorities will not target ordinary users. Instead, the focus remains on individuals and businesses that directly profit from social and digital platforms.
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Content Creators and Foreign Platforms in Focus
This new policy targets three main groups. First, content creators who earn income through monetization programs on platforms like YouTube. Second, influencers and “selebgrams” who are paid for endorsements or sponsored content. Third, foreign OTT (Over-The-Top) service providers such as Netflix and Spotify that operate within Indonesia without local tax obligations.
The government recognizes these entities as major contributors to the local digital economy. However, many currently operate without consistent tax oversight. By targeting these sources, the Ministry of Finance aims to level the playing field for all businesses.
Regulatory Framework and Implementation Plans
To enforce the social media tax effectively, the Ministry is preparing additional regulations. These will define thresholds for income, traffic, or platform activity that trigger tax obligations. PMK No. 37/2025 already outlines the authority to appoint third parties, such as marketplaces, as tax collectors for online transactions.
“The Minister delegates authority to the Director General of Taxes to appoint other parties as tax collectors… and to set transaction value limits and/or a certain threshold of traffic or access,” states Article 4 of PMK No. 37/2025.
New regulations will complement existing tax rules and support digital tracking mechanisms. This approach ensures transparency and compliance among digital income earners.
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Part of Broader 2026 Tax Reform Strategy
The introduction of a social media tax aligns with the government’s target to increase state revenue. For 2026, Indonesia aims for a revenue-to-GDP ratio between 11.71% and 12.22%. The tax-to-GDP ratio should reach 10.08% to 10.45%.
Anggito outlined six supporting strategies, including joint ventures between ministries, enhancing digital tax collection capacity, optimizing non-tax revenues, strengthening cross-border enforcement, managing state assets, and developing the mineral and coal information system.
“This is a new working approach we started in 2025 with several taxpayers and importers, and we plan to increase that number,” he said, referring to coordinated tax enforcement efforts.
Ensuring Fairness in Online Income Taxation
By introducing the social media tax, Indonesia aims to create a fairer and more modern tax system. The government intends to align its policies with current economic realities and reduce loopholes in the digital space. While implementation may present challenges, the policy sets a precedent for adapting taxation in the digital age.
Source: tempo.co, radarjakarta.com
Image: Piyaset / Getty Images
