Finance Minister Puts Brakes on E-commerce Tax, Focuses on Budget Cuts for Fiscal Discipline

The Ministry of Finance Postpones E-commerce Tax Implementation Indefinitely, Targets 6% Economic Growth
The Ministry of Finance has formally refuted the setting of a deadline for delaying the implementation of the new tax collection scheme for e-commerce merchants until February 2026. Finance Minister Purbaya Yudhi Sadewa asserted that the implementation of Minister of Finance Regulation (PMK) Number 37/2025 will be postponed indefinitely, and will only be reconsidered once the national economic growth reaches a level of 6% or more. This statement simultaneously clarifies earlier information provided by the Director-General of Taxes.

The main priority for this postponement policy is economic recovery and maintaining the public's purchasing power. The government emphasized it would not impose new tax burdens before the fiscal stimulus that has been disbursed fully impacts the economic system. "If the economy grows by 6% or more, then I will consider it. So, I am the Minister," Purbaya said, affirming his authority over this strategic decision.

For context, PMK No. 37/2025 regulates the collection scheme for Income Tax (PPh) Article 22 at a rate of 0.5% of the gross turnover of merchants on online marketplaces. Based on the regulation, Electronic System Providers for Trade (PMSE) are appointed as the withholding agents. The primary goal of this regulation is not a significant increase in state revenue, but rather an instrument to improve tax compliance and provide administrative ease for Taxpayers.

Ministry of Finance Implements Budget Efficiency to Control State Debt

The government, through the Ministry of Finance, will implement a strict state spending efficiency policy as a strategy to control the issuance of new debt. Finance Minister Purbaya Yudhi Sadewa stated a commitment to prioritizing the allocation of the State Budget (APBN) to programs that are productive and can optimally encourage economic growth, while simultaneously reducing reliance on debt financing.

This efficiency measure will target programs deemed inefficient and wasteful without cutting government priority programs. "I am cutting inefficient programs, which only waste state money that was partly obtained from debt. So, we will create more responsible spending going forward," Purbaya stressed. This policy is part of an effort to establish fiscal discipline and ensure that every debt financing generates a commensurate economic impact.

Despite the implementation of this policy, the government affirmed that the current debt condition is at a safe level. As of June 2025, the total government debt was recorded at Rp9,138.05 trillion with the debt-to-GDP ratio at a level of 39.86%. This ratio figure is claimed to be still moderate and below the safe threshold according to international standards, as well as lower than that of other G20 countries.