The Implementation of Split Payment Method in Digital VAT Collection to Optimize State Revenue amid Global Economic Uncertainty

Abstract

The prolonged conflict between Russia and Ukraine since 2022 had a significant impact on the international market. Russia as a country rich in natural resources has made Russia occupy a strategic position in the international market, such as the world's third-largest producer and exporter of oil and coal, and the second- largest exporter of natural gas.
On the other hand, Ukraine also has a vital role in meeting the needs of the global market. Ukraine ranks first as anexporter of sunflower oil, the second largest exporter of hunting, and the fifth largest exporter of wheat. The two countries are particularly important suppliers for countries in the world. Therefore, the war increased commodity prices, especially world oil due to inflationary pressures and macro supply chain disturbances due to high dependence on oil and gas commodities, especially in the Southeast Asia (ASEAN) region. This has implications for rising prices of goods and services in the Southeast Asia region, including Indonesia. To suppress inflation in Indonesia, the government must be able to maximize the function of the State Budget as a shock absorber from the global recession that is being overstretched. Optimizing the APBN function can be done through tax base extension. The tax base that the government needs to reach in this Digital era is Value Added Tax (VAT) for trade through electronic systems or Digital VAT. Digital VAT application requires an organized and systematic system. The system was created to reduce the potential for mass smuggling transactions which can minimize potential state revenues. In this situation, the
Automatic Exchange of Information (AEoI) between ASEAN countries is the right step. The application of AEoI can open up transparency in the circulation of funds and have the maximum impact on the implementation of digital VAT. However, there is potential for fraud and high tax costs considering that the United States (US) as the ruling country of the Digital economy does not implement AEoI. One of the reasons for this fraud to arise is because of the negative connotation of an administrative system that tends to be complicated and not transparent. In this research, the writing method used is desk research with qualitative analysis to improve the application of the split-payment method in dig VAT collection. The results of the analysis show that separate payment methods can reduce fraud and minimize tax costs. This policy has several aspects that can be used as opportunities and challenges to realize the application of the joint payment method for DigitalAT collection