Fiscal Impact of the Gig Economy: Taxation, Regulation, and State Revenue
Keywords:
Gig Economy Fiscal Policy Value-Add Tax Social Security Regulation State Revenue IndonesiaAbstract
The fast growth of the gig economy has reshaped labor markets through its provision of flexible work options yet it creates major problems for tax collection and regulatory oversight. The Indonesian economy has seen millions of workers join ride-hailing and food delivery and online freelancing platforms which drive digital transformation and economic expansion. The sector faces three major barriers to public revenue generation and social protection system support because of its unstructured payment systems and unclear employment status and weak enforcement mechanisms. The research investigates the fiscal aspects of Indonesia's gig economy through a combination of qualitative literature review and comparative policy evaluation. The fiscal impact of the gig economy in Indonesia occurs through three main channels which include platform transaction taxes and worker income taxes and corporate profit taxes and social security contributions. The implementation of platform agent VAT collection and standardized income reporting and presumptive tax systems for micro-earners leads to better tax compliance and reduced tax evasion. The tax base expansion depends on platform accountability and proportional taxation and digital compliance tools according to evidence from other countries. The research demonstrates how regulatory obstacles related to worker misclassification and fragmented income streams and institutional coordination problems create barriers to fiscal sustainability. The research supports hybrid approaches which combine platform-based tax withholding systems with expanded VAT coverage through platform responsibility and basic tax systems for low-income workers and distinct legal frameworks for worker protection and digital taxpayer service development. The implementation of these measures by Indonesia will create revenue stability while enhancing social security programs and guarantee the gig economy contributes to enduring economic stability and fair fiscal involvement.
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