Legal Literacy - On Monday, July 14, 2025, the Minister of Finance Sri Mulyani officially enacted PMK Number 37 of 2025. This regulation governs the appointment of other parties as tax collectors, as well as the procedures for collecting, depositing, and reporting taxes on the income of domestic traders who transact through electronic systems. This rule requires platforms e-commerce such as Shopee, Tokopedia, and the like to collect Income Tax (PPh) Article 22 of 0.5 percent of the annual gross turnover of domestic traders who have a turnover of more than Rp500 million to Rp4.8 billion. This policy has sparked controversy: on the one hand, it is considered a step to expand the digital tax base, but on the other hand, its effectiveness and partiality towards MSME players who are still economically vulnerable are questioned. The government claims that the issuance of this PMK aims to facilitate public participation in development through tax contributions. In its consideration, this policy was drawn up to fulfill the principles of legal certainty, fairness, ease, and simplicity of administration, while increasing the efficiency and effectiveness of tax collection in the digital economy era. The legal umbrella for this policy refers to Article 44E paragraph (2) letter f of Law Number 6 of 1983 concerning General Provisions and Tax Procedures, which was last amended through Law Number 6 of 2023 concerning the Stipulation of the Job Creation Perppu into Law. On this basis, the platform e-commerce is designated as another party authorized to collect, deposit, and report income tax from domestic traders. Although the government stipulates that small traders with a turnover of under Rp500 million are exempt from tax collection, the reality on the ground is far more complex. Based on Article 6 of PMK 37/2025, to obtain this exemption, traders must actively submit information in the form of a Taxpayer Identification Number (NPWP) or Resident Identification Number (NIK), correspondence address (paragraph 1), and a statement that their turnover has not exceeded Rp500 million (paragraph 2), to the platform where they sell. Even if their turnover skyrockets, traders are also required to submit an additional statement no later than the end of the month when the limit is exceeded (paragraphs 6 and 7). This administrative burden is fully borne by the traders, including the obligation to update the statement every beginning of the year (paragraph 5). For many MSME players who do not have adequate tax literacy, this mechanism actually opens up the potential for deductions that should not occur simply due to administrative negligence. In fact, if referring to the mandate of the constitution, Article 33 paragraph (1) of the 1945 Constitution clearly states that the economy is structured as a joint effort based on the principle of kinship. This spirit mandates that the state always side with small and medium economic actors, not burden them fiscally. Data from the Coordinating Ministry for Economic Affairs shows that MSMEs contribute around 60 percent to Indonesia's Gross Domestic Product (GDP), with a value reaching around Rp9,580 trillion in 2023. In addition, MSMEs also absorb up to 97 percent of the national workforce or around 117 million people. This figure confirms that MSMEs are not just complementary, but the backbone of the national economy. With such a large contribution, digital tax policies should favor strengthening the resilience of small business actors, not burdening them with complex collection systems that risk adding bureaucratic burdens. The next problem lies in the collection basis which refers to turnover, not net profit. Consequently, taxes are still imposed even if the trader does not make a profit or even suffers a loss. In practice, digital business actors also face various deductions from the platform, such as service fees, discount obligations, and advertising commissions. On Tokopedia, for example, service fees for a number of product categories can reach 10 percent. If a trader has a turnover of Rp500 million per month, then Rp50 million must be allocated only for service fees, not including tax deductions. This situation creates a real double burden. Traders who are unable to follow the promotion algorithm will be marginalized, while at the same time they are still required to pay taxes even though their profit margin is very thin. If offline sellers often face illegal levies from individuals in the field, digital business actors today are actually subject to official levies by the state. The difference is that one violates the law, while the other is regulated by law. Imposing taxes based on turnover without considering profit margins or the administrative capacity of small traders risks creating structural inequality between large business actors and MSMEs. This scheme could hit small players who are actually the main drivers of the digital economy from below. The government needs to review the mechanism and parameters for collecting Income Tax e-commerce to be fairer and more proportional. Without proper correction, this policy not only violates the spirit of the constitution, but also damages the rapidly growing digital trade ecosystem.
On the other hand, the complexity of this tax system is also feared to encourage small traders to return to the informal path to avoid confusing administrative burdens. This is certainly contrary to the government's efforts to expand the tax base and encourage the digitalization of MSMEs. Instead of increasing tax compliance, a complicated system could widen the gap between small business actors and access to formal facilities. If the government wants to create an inclusive digital trade ecosystem, then tax policies should not only be oriented towards state revenue, but also pay attention to the adaptive capacity of small business actors.