Bank as a VAT Collector: A Real Time Solution for Improving VAT Collection in Digital Economy

Hadining Kusumastuti

Universitas Indonesia Conferences, The 4th International Conference of Vocational Higher Education

Hadining Kusumastuti

Last modified: 2019-03-19

Abstract

Research aims: This paper aims to explore the possibility of involving the Bank as a Financial Institution in acting as a Value Added Tax (VAT) Collector in Indonesia for taxing digital transactions using digital platforms as a means to ease the administration process. Methodology: This study collected secondary data from systematic literature review and documentations.Findings: The results of the discussion indicate that technology platform readiness is needed to facilitate the appointment of the Bank as VAT collector and the potential imposition of VAT collection fees on the Bank's customers.Theoretical implications: The raising of digital economic transactions poses its own challenges for the Government of Indonesia (GoI) in taxing digital transactions, especially in the VAT collection mechanism. The sustainability of VAT as an effective source of income is very dependent on the ability of GoI to enforce the rules and collect VAT effectively on the transaction concerned or has the potential to be subject to VAT. Considering the importance of the issue, this study fills the voids of existing literature by exploring the feasibility of banks as third parties VAT Collectors by utilizing the development of technology platforms[SM1] .

Practical implications: The involvement of the Bank as a VAT Collector can assist the Government in imposing VAT on the digital economy.

Keywords: VAT Collector, Digital Economy, Ease of Administration

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