The Challenge of MSME Protection Amidst Import Data Discrepancies and Digital Tax Optimization

Indonesia's economy is facing two contrasting conditions in the context of optimizing state revenue and protecting the domestic market. On one hand, the government is attempting to overcome the loss of potential income due to the influx of imported goods that are not fully recorded. However, on the other hand, tax authorities have successfully secured large amounts of revenue from the continuously growing digital economy sector.

Regarding the flow of physical goods, the Minister of Micro, Small, and Medium Enterprises (MSMEs), Maman Abdurrahman, revealed a significant data gap between China's export records to Indonesia and the official import data recorded by Indonesian customs. This recording discrepancy is strongly suspected to be related to under invoicing practices, a condition where some imported goods enter without being fully recorded in the national customs system, which was also previously mentioned by President Prabowo Subianto. This condition not only erodes potential state revenue from the import sector but also becomes a social issue as it suppresses the competitiveness of domestic MSME players due to the flood of unrecorded foreign products.

Based on UNTrade 2024 data processed by the Ministry of MSMEs, this recording discrepancy is massively visible in textile, apparel, and footwear commodities. The details of the commodities experiencing the largest recording discrepancies include:

• Fabric Shoes (HS 6404): China's export value was recorded at around US$157.2 million, while Indonesia's imports only recorded around US$112.4 million, leaving an unnatural gap of more than US$40 million.
• T-shirts (HS 6109): China's exports were recorded at around US$61.7 million, inversely proportional to Indonesia's import recording which was only in the range of US$20.4 million.
• Corsets and Bras (HS 6212): There is a sharp recording discrepancy with China's exports reaching around US$83.2 million, while Indonesia's imports only recorded around US$28.8 million.
• Women's Robes and Skirts (HS 6204): China's exports touched around US$74.2 million, while Indonesia's imports were only recorded at around US$16.8 million, or more than four times lower.
• Underwear: China's exports for women's underwear (HS 6108) were recorded at around US$48.5 million compared to Indonesia's imports of US$13.9 million. Meanwhile, for men's underwear (HS 6107), China's exports were around US$16.2 million compared to Indonesia's imports of US$4.6 million.
• Men's Pants and Suits (HS 6203): China's exports reached around US$30 million, while Indonesia's imports were recorded at around US$8.2 million.
• Hijabs and Shawls (HS 6214): China's exports were recorded at around US$9 million, very far from Indonesia's import record which was only around US$0.6 million.
• Baby Clothes (HS 6111): This product, widely produced by local MSMEs, recorded exports from China of around US$4.2 million, higher compared to Indonesia's import record of US$2.7 million.

Amidst the recording challenges in the physical goods flow, the government has actually recorded massive success in collecting taxes from digital transactions. The Directorate General of Taxes (DJP) reported that as of January 31, 2026, total tax revenue from the digital economy sector had reached Rp47.18 trillion. This figure is an accumulation of revenues since 2020.

The revenue from the digital economy sector is dominated by the Value Added Tax on Trade Through Electronic Systems (PPN PMSE) which contributed Rp36.69 trillion. This tax is collected by marketplaces and digital platforms such as Shopee, Tokopedia, and other similar applications. The PPN PMSE deposit trend continues to increase, with specific realization in 2025 alone reaching Rp10.32 trillion. As of the end of January 2026, the government has appointed 242 companies as PPN PMSE collecting entities.

Besides PPN PMSE, other digital economy sectors that also provided massive contributions include taxes from crypto transactions worth Rp1.93 trillion, financial technology (fintech) taxes amounting to Rp4.47 trillion, and other digital economy taxes received through the Tax Complaint Information System (SIPP) amounting to Rp4.1 trillion. This achievement reflects the increasingly large contribution of the digital economy to state revenue.

These two phenomena show the importance of policy synchronization in economic supervision. The success in tracking and collecting taxes in the digital sector is expected to serve as momentum to improve the supervision system at physical customs borders. This step is absolutely necessary to ensure that the prevention of under invoicing practices runs effectively, so that state revenue can be comprehensively optimized while protecting the resilience of local MSME players in the domestic market.