Following the government’s earlier plan to impose a 10% tax on sports and entertainment venues starting in 2025, Indonesia will expand its tax scope to include digital economic activities on social media platforms. Beginning in 2026, the new policy will apply to content creators, influencers, and foreign digital service providers such as YouTube, TikTok, Instagram, Netflix, and Spotify.
This move is part of the Ministry of Finance’s broader effort to modernize Indonesia’s tax system and tap into the rapidly expanding digital economy.
“We will begin identifying tax potential from social media and digital data to support our 2026 state budget revenue target,” said Finance Minister Sri Mulyani Indrawati at a press conference on July 14, 2025, in Jakarta, as quoted by hariankepri.com.
Who Will Be Taxed?
The new tax policy will not affect casual social media users. Instead, it will focus on three main groups:
- Content creators who earn income through platform monetization on YouTube, TikTok, or Instagram.
- Influencers and celebrities who are paid for endorsements and promotions.
- Foreign digital service providers such as Netflix, Spotify, and other platforms offering paid services in Indonesia.
The Directorate General of Taxes (DJP) will use open-source data, digital technology, and social media monitoring tools to identify and track taxable income. The government is currently developing supporting regulations and a real-time data monitoring system.
“Digital economy activities need to be incorporated into the tax system to ensure fairness and broaden the tax base,” added Sri Mulyani.
Legal Foundation and Preparation
The policy aligns with the government’s broader tax reform efforts under the Harmonization of Tax Regulations Law (UU HPP). This law allows the government to strengthen oversight of cross-border transactions and modernize tax collection mechanisms.
The legal groundwork is also supported by Minister of Finance Regulation No. 37/2025, which mandates electronic commerce operators, such as official online marketplaces, to collect income tax (PPh) on digital transactions.
“This initiative will start gradually in 2025 and become fully implemented in 2026,” said Deputy Finance Minister Anggito Abimanyu, as reported by lampost.co.
He emphasized that the policy is part of a larger plan to transform the digital economy into a key contributor to national tax revenue.
According to pajak.go.id, income tax for content creators will vary depending on their professional status—whether they are employees, freelancers, or business entities.
Under Government Regulation No. 55/2022, content creators operating as business entities are subject to a 0.5% income tax. However, those with annual gross revenue below USD 30,864 are not required to pay tax. This policy is part of the government’s effort to provide a fair threshold for small-scale digital entrepreneurs.
To ensure compliance, the Ministry of Finance is expanding partnerships with digital platforms to gain real-time access to transaction data. This will improve transparency and the efficiency of the tax reporting system.
As part of its preparation, the government will launch an extensive outreach campaign to inform digital entrepreneurs and creators about their upcoming tax obligations.
Source: hariankepri.com, gosumbar.com, lampost.co, pajak.go.id
Photo Credit: Ivan Samkov (pexels.com)
