Regulations and Compliance in Electronic Commerce Taxation Policies: Addressing Cybersecurity Challenges in the Digital Economy

Abstract

Tax policies across countries reveal disparities that cybercriminals can exploit, taking advantage of the development of the e-commerce sector. There is a dearth of studies that could show how to strengthen cybersecurity measures within tax systems to safeguard against data breaches and fraud and ensure the integrity of tax revenue to protect consumers from the indirect costs of cybercrime-driven tax evasion. This research employed normative juridical and comparative approaches and a qualitative research design to gain a comprehensive understanding of e-commerce taxation issues. It examined current regulations and compliance challenges in electronic commerce taxation policies and focused on addressing security challenges in Indonesia's digital economy. The study revealed that electronic transactions are already defined under various laws of Indonesia namely Law Number 11 of 2008 concerning Electronic Information and Transactions (ITE Law) which regulated all kinds of acts using computers, computer networks, and/or other electronic media; Law Number 7 of 2014 concerning Trade defines which was a law to regulate a;; types of trading through Electronic Systems; and the Directorate General of Taxes Number SE-62/PJ/2013, regarding Affirmation of Tax Provisions on E-commerce Transactions for taxation purposes. The study enriches readers’ understanding of legislative regulations and the effectiveness of e-commerce taxation in Indonesia. The study implies that Indonesia has a well-structured tax framework that has the potential to enhance both the capacity and adherence of e-commerce businesses to taxation standards.