Indonesia is largely a self-assessment tax environment, and enforcement remains a

priority of the tax authorities. As well as tax audits, the DGT which we know as DJP has made
efforts to collect information from various sources and is issuing monitoring guidelines in several
areas to assist in achieving the tax revenue targets. Responding to recent confusion over a
finance ministerial regulation on taxation for online transactions, the Director General of
Taxation will issue a regulation as a guideline for traders who conduct business using e-
commerce platforms. There are some reasons why online merchants need to pay their taxes
using e-tax.

First, the main reason is to apply justice for all merchants. The price difference that an
online marketplace offers since their system doesn’t check whether PKP merchants are
collecting VAT or not, is reason enough for shoppers to switch to them. That's why day by day
there is an increasing number of online merchants, because recruiting some of them, by
switching to online merchants, they can trade by taking more profits by passing the dir. With this
e-tax, all online merchants are expected to pay all the obligations of the taxes as they should, so
that entrepreneurs in this country, especially offline stores, do not feel disadvantaged, and can
return to compete again.

Next, there is a big potential from online merchants to increase nation income. With
some 255 million people and 17,000 islands, Indonesia is big in many ways except one: its tax
base.The biggest source of Indonesia’s income is from tax revenue. However, Indonesia has
missed its revenue targets for several years running. The last time Indonesia's tax revenue
realization achieved the government's target was in 2008. In the following 8 years, a widening
tax shortfall occurred as the government's tax revenue target rose more rapidly compared to tax
revenue realization. In the 2017 State Budget Indonesia targets to collect IDR 1,498.9 trillion in
tax revenue, but the fact is the tax revenue realization in 2017 only reached IDR 1,200 - 1,300
trillion, implying another big shortfall. For Indonesia to live up to its potential, that number has to
increase.

Then, most of online merchants feel bothered about the online merchants. We all know
too well the headache they suffer every year from trying to organise all their paperwork to filling
in the forms and queuing to file them, the whole process takes hours if not days to complete.
Hence, with the e-tax in this era, all merchants should excuse no more to not pay taxes just
because the system is complicated and burdensome, the current e-tax system comes as a
better solution, it has been made very simple and capable to report it when and wherever.

In short, by using of e-tax, online merchants can pay their taxes easier. All types of
merchants in Indonesia needed to pay their taxes, prepared a report on why they were paying
that amount, and brought it all manually to the Tax Office. With e-tax, merchants just need to sit
and click through everything online, and the process will be taken care of. OnlinePajak succeed
to change the payment method to modern ways.