International Journal of Research in Business and Social Science 7(3), 2018: 01-09 Page1 Research in Business and Social Science IJRBS Vol 7 No 3, ISSN: 2147-4478 Contents available at www.ssbfnet.com/ojs https://doi.org/10.20525/ijrbs.v7i3.900 E-commerce Taxation and Fiscal Policy Perspective: The Case of Indonesia Sigit Setiawan Senior Researcher at Fiscal Policy Agency, Ministry of Finance Indonesia Abstract The Indonesian government is now seriously exploring in depth the proposed tax imposition for e- commerce. In this context, this paper will discuss the following issues: the first, if Indonesian government should impose the tax on e-commerce; the second, how much the potential tax revenue from e- commerce is; and the third, how Indonesian fiscal policy perspective views e-commerce taxation. The study in this paper adopts a descriptive analytical research method. The study concludes several points. Indonesia should tax its e-commerce. The total potential tax revenue on e-commerce from VAT and income tax in 2018 ranges from almost Rp11.75 trillion to Rp16.64 trillion, with VAT dominates the contribution up to more than 90% of the total tax revenue. By not levying the tax in the year means Indonesian government will lose a partial or the most of tax revenue. The revenue loss is potentially getting bigger in the coming years if the government still fails to collect the tax. E-commerce taxation should not be strictly enforced in the beginning, yet more is emphasized on socialization and education actions. It is also intended to help the online platform to be compliant. Tax policy in e-commerce can be used for the purpose of regulating the economy, such as to control excessive online import purchasing. Key words: E-Commerce, Taxation, Fiscal Policy, Tax Revenue JEL classification: H25, H30, M21 Submitted: 14.10.2018 - Accepted: 15.11.2018 Introduction The development of technology has penetrated into all aspects of human life and many people make use of it for economic solution matters. The internet technology and its sophistication today really assists human beings to meet their needs. The inventors, innovators and entrepreneurs then begin to pick them as a transaction channel to satisfy human needs. This situation triggers the emergence of e-commerce or electronic commerce, a modern tool for online shopping and business transactions. E-commerce increasingly enables people in making transactions since it no longer requires people to provide much energy and time to find the things they need. It is in line with the essence of e-commerce, which is to let the buying and selling process not to be restricted by time and distance. E-commerce in Indonesia is growing fast lately. If in the early 2000s, trade with physical stores or off-line stores - as seen in the mushrooming shopping malls in many places - found a very rapid growth momentum in Indonesia. The next ten years a dinamic gradual shifting took place. Facilitated with improved logistical access, some consumers (initially in big cities but now reaching smaller cities), are gradually turning to online