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1 (2020)
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Creative Economic Reposition for AYER

Technopreneurs Innovation in Indonesia: An Vol. 27 No. 1 (2020)
http://ayerjournal.com/index.php/ayer/a
Initiation of Tax Incentives in Corruption rticle/view/118

Prevention How to Cite:

Anis Wahyu Hermawan, & Henry
Dianto Pardamean Sinaga. (2020).
Creative Economic Reposition For
Anis Wahyu Hermawan1, Henry Dianto Pardamean Sinaga2
Technopreneurs Innovation In
Staff of the Directorate General of Taxes and Student of the
1
Indonesia: An Initiation Of Tax
Incentives In Corruption Prevention. A
Universitas Terbuka, Jakarta, Indonesia Y E R Journal, 27(1), 94 - 115.
2
Staff of the Directorate General of Taxes and Student of the Editorial: Revista de la Asociación de

Law Doctoral Program at Diponegoro University, Semarang, Historia Contemporánea (AHC),

coeditada por la AHC y Marcial Pons-
Indonesia
Ediciones de Historia.
Corresponding Author’s Email: sinagahenrydp@gmail.com ISSN: 1134-2277 | ISSN Electrónico:
2255-5838

Abstract
 Informes de citas de revistas de ISI.
Factor de Impacto: 0.318, Q3
The creative economy which is inherent in the economy and
 SCImago (Scopus-Elsevier). Factor
technology deserves to be a corruption prevention catalyst de impacto SJR: 0.17, Q2
considering that its achievement will be directly  MIAR. Factor de Impacto: 10,9

proportional to the growth of technopreneurs, then the

==Open Access=
growth of technopreneurs is directly proportional to the
commercialization of technological innovations that have an
effect on the economy. Furthermore, the growth and
improvement of the country's economy will increase the
supremacy of law, so that supremacy of law will significantly prevent corruption. Technological
innovations that are fundamental to economic growth, increased productivity, and
competitiveness, will require support, freedom, and incentives, especially tax incentives. However,
there are still irregularities in the development and the scarcity of studies on tax incentives to
technopreneurs in increasing and attracting creative economic activities, so it is important and
sufficient to apply Pound's thinking which states the law as a tool of social engineering. This study
produces two main conclusions. First, the regulation of tax incentives in Indonesia is still in general,
which among others are regulated in Article 31A paragraph (1) Income Tax Law, VAT Law,
Government Regulation No. 78 of 2019, and Government Regulation No. 23 of 2018. It has not yet

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touched directly the substance of the creative economy in Indonesia which is loaded with
innovations of technopreneurs which are vital functions. Second, a creative economic reposition
that is strengthened by tax incentives in preventing corruption in Indonesia is conceptualized in the
form of creative activities that are value-added, efficient, orderly and orderly in connecting certain
goals of sellers, buyers, technopreneurs, and regulators through the use of technology that obtains
incentives taxation in order to increase tax compliance and narrow the space for poachers of
economic rent and illegal business lobbying that harms the country's finances/economy. It is
expected that the Creative Economy Act, in general, can produce a balance of legal certainty,
justice, and public benefit as an effort to prevent corruption, and in particular regulations can be
produced specifically for tax facilities, especially for technopreneurs and award awards to buyers,
sellers, and technopreneurs whose transactions innovatively, transparently and accountably
protected from perpetrators of economic rent or individuals who are detrimental to the country's
finances/economy.

Keywords: Creative Economy Reposition, Tax Incentives, Technopreneurs, Corruption Prevention.

A. INTRODUCTION

The concept of creative economy, such as electronic business (e-business) and e-commerce in a
country are policies to improve the regulatory framework conditions for innovation and
competitiveness (Blind, 2016). The creative economy has tremendously increased in global markets
in recent years, including in Indonesia. The creative economy has significantly affected gross
domestic product (GDP) in Indonesia, where from 2015 to 2018 it has always been growing, with
contributions in each year being IDR 852 trillion, IDR 923 trillion, IDR 1,009 trillion, and IDR 1,105
trillion (Creative Economy Agency, 2019). In addition, the valuation value of only four digital
economy-based companies, that is Go-Jek, Traveloka, Tokopedia, and Bukalapak which has been
above USD 1 billion (The Ministry of Communications and Informatics of the Republic Indonesia,
2018) and supported by a total population of 261.9 million people in 2017 with the percentage of
households that have ever accessing the internet has always increased from 2014 to 2017, which
has been 57.33% in 2017, from only 47.22% in 2016, only 41.98% in 2015, and only 35, 64% in 2014
(Badan Pusat Statistik, 2018), showed that it was time for adequate government support on
technological innovations as a risky strategy to demonstrate its ability to overcome overall higher
levels of uncertainty and to encourage innovation in solving the market failure (Nanda & Rhodes-
Kropf, 2013).
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However, there is a desire to grow technopreneurs not to create disorder, bearing in mind that a
developing society is always characterized by change, so that a law is needed that can maintain
order (Li, 2014) through legal certainty and must be able to regulate the process of change in
society on a regular basis, which changes regularly can be assisted by legislation or court decision
or a combination of both (Atmasasmita, 2010). Concerns about changes in society that have the
potential for creating close irregularities due to the persistence of several barriers in various areas
due to globalization, including global fraud and risk, data protection, the authentication of buyers
and sellers, the up to date currency conversion, the consistent guidelines and legal constraints of e-
commerce, the difference between legal jurisdictions, and the areas of government regulation
(such as tariffs, customs, and taxation) (Turban et al., 2018).

Considering the Indonesian government's policy is to foster and develop a national creative
economy whose achievements are expected to be directly proportional to the growth of
technopreneurs, while the growth of technopreneurs themselves is also directly proportional to the
commercialization of technological innovations that have an effect on the economy. Then, national
economic growth will significantly increase the supremacy of law, so that the rule of law can
significantly increase the level of corruption prevention and control, as Maslii et al. (2018)
confirmed that the creative economy is inherent in the economy and technology (information,
innovation, intelligence) which should be a catalyst for fighting corruption considering the
phenomenon of corruption is an economic, social and political consequence, so that this study will
answer two main problems. First, how is the tax incentive arrangement in fostering a creative
economy in Indonesia which is full of innovations from technopreneurs? Second, how is the
reposition of the creative economy strengthened by tax incentives in preventing corruption in
Indonesia?.

B. LITERATURE REVIEW

As the state of Indonesia shall be state based on the rule of law and all taxes and other
compulsory levies for the needs of state shall be regulated by law, as formulated in Article 1
paragraph (3) and Article 23A of the Fourth Amendment of the 1945 Constitution of the
Republic of Indonesia (the 1945 Constitution). It is very necessary regulation that underlies
matters relating to tax in Indonesia considering the formulation of the rule of law is closely
related to the trends that exist in society (Rahardjo, 2009a). However, for tax legislation to
grow technopreneurs in Indonesia, these regulations must continue to have validity in society
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through state power to enforce them which must contain legal values, public benefits, legal
certainty, and justice (Radbruch, 2006).

The ideality of legal values to grow technopreneurs in Indonesia transactions becomes even more
beneficial if supported by the tax sector, which the modern states generally employ it for
governmental revenue, retribution, and regulation (Avi-Yonah, 2016). Strengthening of regulatory
tax function is the philosophical background of juridical tax law in order to show its active role in
growing technopreneurs because the growth of technopreneurs means also the growth for
Indonesian people who are the target users of the application, central and regional governments,
digital start-up actions who participate in the (creative) economy (The Ministry of Communications
and Informatics of the Republic Indonesia, 2018). Further about regulatory tax function, although
the function can lead to clash in both revenue and retribution functions, regulatory tax function,
which emphasizes that taxation must be fair, non-discriminatory, and the imposition must be
balanced according to the ability of the subject (equality principle) and emphasize that all tax
collection must be clear/certain both about the subject of taxes, tax objects, tax rates, time of tax
payment (certainty principle) (Smith, 2007), is the governmental act or process of controlling by
rule or restriction (Gardner, 2004) that governments can use to steer and to supervisory control of
private sector activities for governmental directions (Avi-Yonah, 2016), including preventing and
tackling illegal lobbying between the private sector and state administrators.

Creative economic developments which turned out to be in the context of tax law in Indonesia
must be followed by legal certainty through the enactment of laws and regulations that have
public benefits and justice, implying the need for great attention to the functioning of law in
society, as Roscoe Pound emphasized that law as a tool of social engineering (Rumokov &
Maramis, 2014). That is, it is the task of social engineering to conceptualize and/or reconcile tax
certainty (legal) in the face of a rapidly developing creative economic phenomenon, as according
to the Pound, three classifications of legitimate protected interests must be carried out, namely
those covering public interests, social interests, and personal interests. Public interests include the
interests of the state as a legal entity in maintaining its personality and nature, and the interests of
the state as the guardians of social interests. Whereas personal interests consist of interests in
household relations and interests in a substance which all include physical integrity, free will,
personal freedom, and freedom of opinion (Friedmann, 1990). So that in a society that always
builds and demands regular change, the law as a means of community change is a conscious use
of law to achieve a particular community situation as aspired or desired (Rahardjo, 2009b).
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The urgency of the governmental support refers to the many benefits that have been obtained by
actors participating in this creative economy in connection with the availability of various networks,
the simplicity and convenience of business transactions from various places, at reasonable costs
and in various choices. The success of other countries can also be one of the main considerations,
as Italy in the 1970s has introduced the policies to foster inter-firm networks and to stimulate
collaboration among existing groups of companies. Then, Denmark in 1989 through the Danish
Network Program that had the objective to assist small companies to compete in the Single
European Market, within 18 months since 1989 around 3500 Danish companies had become
involved in networks, so that many countries followed the success of the program, such as Norway,
Australia, the United States, Canada, New Zealand and the United Kingdom (Cunningham &
Ramlogan, 2016).

In fact, there are studies that seek to develop technological innovation through regulations,
especially tax regulations, as Zschau (1981) has emphasized that technological innovations, which
are fundamental to economic growth, increased productivity, and competitiveness of international
trade, require support, freedom, and incentives for techno-entrepreneurs, in which case it is
strongly recommended that tax regulations are one of the most powerful government instruments
to encourage the advancement of technological innovation. This is in line with Davidson (2009)
affirmation that the role of taxes in realizing their active participation in creative economic activities
that support continuous innovation of technopreneurs can be done through several methods that
have been successfully applied by several countries, such as offering tax incentives to stimulate
research and development (R&D), and/or the possibility to place a special taxation moratorium on
the internet (such as the one-year tax exemption of internet access as it once was in the 1998
Internet Tax Freedom Act in the US), and/or special accounting treatment (such as the adoption of
accelerated depreciation methods). Tax incentives, which are designed to allow a firm to reduce its
tax burden depending on the size of - or increase in - eligible activities in order to meet particular
policy goals, have been undertaken in many countries, such as 27 countries belonging to the OECD
and Non-OECD countries, such as Brazil, China, India, Russia, Singapore, and South Africa.

C. METHOD

The development of the creative economy that is so rapid and the scope of the creative
economy is very broad, shows that in the activities and interactions of the parties involved in
it can not be separated from the challenges of technological innovation and tax (law)
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innovation, so that interdisciplinary studies are needed the study starts with and is
dominated by Legal Studies while still requiring research methods from other sciences as a
support and complement in this research. In this case, this legal research will combine legal
disciplines as the basis and an interdisciplinary approach to enrich the literature and
perspective of existing tax studies, as Freedman (2005) has asserted that: "Tax law research is
a perfect area for application of theory, interdisciplinary study, and a policy -based approach.
There is an abundance of literature available in the fields of economics, politics, sociology,
history and accountancy, and tax legislation can only be properly understood in terms of its
broad economic, political, and social objectives (or lack of them)”.

This interdisciplinary study uses normative (or also known as library research) methods, which are
conducted by examining library materials or secondary data in the form of primary, secondary and
tertiary legal materials. Primary legal material is legal material that has binding power, such as the
1945 Indonesian Constitution and applicable and binding laws and regulations related to this
research. Secondary legal materials are materials that are closely related to primary legal materials
and can analyze and understand primary legal materials, such as draft laws, textbooks, articles,
scientific journals, seminar results, and research results in the field of law and taxation. Meanwhile,
tertiary legal materials are materials that provide information about primary and secondary legal
materials, such as internet sources, dictionaries, encyclopedias, and other tertiary legal materials.
The literature obtained will be reviewed based on the Principles of Law, Legal Systematics, Vertical
and Horizontal Synchronization Levels of Law, and Comparative Law in general and in the field of
taxation specifically (Soemitro, 1990).

The secondary data obtained were examined using a descriptive - comparative - prescriptive
approach and critically analyzed in a qualitative juridical manner based on a hierarchy of laws that
embody legal certainty, justice, and maximum benefits for the community referred to in
accordance with Visser 't Hooft (in Sidharta, 2009) which requires three basic references, namely
law that has authority that guarantees legal certainty and predictability, law that has workability
that can prevent and cope with internal inconsistencies and contradictions in the rule of law
(coherence), and law that can be accepted by the parties and also by the community.

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D. RESULT AND DISCUSSION

1. Overview of the Creative Economy and Corruption Prevention

There are several thoughts about the creative economy. Howkins (2007), known as the Father of
Creative Economy, combines the words creativity and economics as an effort to create
extraordinary value and wealth, as creativity is the ability of one or more people to produce
something new that is personal, original and meaningful, economics refers to a system for the
production, exchange, and consumption of goods and services that generally deal with the
problem of how individuals and society satisfy their unlimited desires with limited resources.
Furthermore, Howkins reminded that creativity is not always an economic activity, but can be an
economic activity when generating ideas with economic implications or products that can be
traded, transitioning from abstract to practical, from idea to product or service. Furthermore, the
2019 Opus Book describes the creative economy as a new economic paradigm that relies on ideas,
ideas, or creativity from Human Resources (HR) as the main production factor in its economic
activities. So, it can be said that creative economic resources include creativity and added value,
where creativity is the capacity or ability to produce or create something unique, the solution of a
problem, or something different from the standard while the added value is an increase in the
quality of a product or service in terms of value and economics (Creative Economy Agency, 2019).

The creative economy has developed. The Organization for Economic Co-operation and
Development (OECD, 2014) termed the creative economy with a number of terms, such as "cultural
industry", "content industry" or "copyright industry", and "creative industry". Creative industries are
defined by the OECD as knowledge-based creative activities that connect producers, consumers,
and places through the use of technology, talents, or skills to produce meaningful intangible
cultural products, creative content and experiences, such as advertising, animation, film, games,
music, performing arts, interactive software, and games, and television and radio [28]. The term
creative industry was also put forward by Veselá & Klimová (2014) as the core of the creative
economy, which is a phenomenon of economic development in the post-industrial world, offering
alternative types of growth, even in an economic crisis, consisting of industries that have origins in
creativity, skills, and individual talents and who have the potential to create wealth and
employment opportunities.

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The development of the creative economy in various fields and/or in various terms shows that the
creative economy, which basically utilizes technology, talents, or skills to produce a product and
service can be a means of narrowing the actions of economic rent-seeking, as the scope of the
notion of corruption has spread to actions of economic rent-seekers whose actions are technically
legal but have the potential to reduce economic efficiency through justification of a number of
things, such as making improper prices, monopoly power, weak enforcement of regulations
(Ivanyna et al., 2018), the multi-causal phenomenon of illegal lobbying based on the intention to
exploit (Yadav, 2011) state finances/the country's economy, and payment/purchase of
goods/services whose quality is not in accordance with the contract. The creative economy that is
able to prevent corruption is in line with the thoughts of Kumar et al. (2019) who express its
implementation through sustainable business processes for the creative economy practitioners
themselves as government partners in narrowing corrupt behavior in budgeting and implementing
public investment projects that are detrimental to the country's finance and or detrimental to the
economy country. Of course, business processes in the creative economy use technological
leverage which is primarily to improve service levels, output quality, and productivity.

2. Tax Incentives for Technopreneurs Innovations

The total population of Indonesia at the end of 2017 which has reached 261.9 million people with at
least the number of internet users that have reached 143.26 million people and there have been
more than 8.2 million businesses engaged in the creative economy sector (Creative Economy
Agency, 2019) must can be a momentum for Indonesian tax authorities to increase tax revenue
through voluntary compliance of taxpayers involved (both directly and indirectly) in the creative
economy market whose activities include the active participation of 3 (three) parties, namely
people who are the target user of the digital economy applications, the government (including tax
authority), and the technopreneurs. The target parties in the creative economy that can contribute
to tax revenue are in connection with the transaction of the buyer of goods and/or service users as
well as the seller of goods and or service providers. The momentum of increasing tax revenue from
the creative economy market cannot be separated from the consideration of the technopreneurs
who inevitably have to always invest a very large investment in the latest technology in playing its
main role to build relationships with customers (buyers and sellers), while also having to compete
strictly to control access to markets, where competition can come from foreign technopreneurs
who are generally experienced and have support and facilities (tax) from their home country. In
fact, specifically in technological startup corporations, there are potential problems, such as the
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need for gradual improvement in high-risk investments, the emergence of the lack of scale
necessary for manufacturing economies due to excessive competition, and the emergence of
potential short-term prospects which cause the capability for sustainability. Another thing to watch
out for is the efforts of certain technopreneurs who manage a large volume transaction to pay
taxes as little as possible even though the existence of the business seems to be well established
(Bacache-Beauvallet & Bloch, 2018).

The essence of technopreneur (or in other several scientific articles also known as technological or
technology or technical entrepreneurship or techno-entrepreneurship, and so on) can be
summarized from the thoughts of Dorf and Byers, Shane and Venkataraman, and The Canadian
Academy of Engineering which states it as a style of business of one or several persons who pursue
opportunities that involve identifying high-potential, technology-intensive commercial
opportunities, gathering resources such as talent and capital and managing rapid growth and
significant risk using principled decision-making skills (Prodan, 2007) to achieve their vision and
goals. High potential future business opportunities, as well as high uncertainty in the creative
economy market borne by technopreneurs in order to stimulate the economy of the digital
economy sector, must receive special attention from the government. Government support for
technopreneurs relates to the central role of the technopreneurs in driving continuous innovation
and creativity, which refers to the key features and the ultimate border of the creative economy in
gaining high performance is innovation, not the price (Carayannis et al., 2015). It must be realized
that innovation in the creative economy that must be carried out on an ongoing basis is
reasonable rationality for the success of a product or service that is generally only a short-term,
while the pace of globalization is very rapid. This causes innovation like a hatchet that is very
complex and has a high risk for technopreneurs, because its success will build an economic cycle,
enable sustainable competitiveness, create value and profits, and attract and retain the most
productive and creative personnel, but if it fails it will become serious problems, such as losses,
employees, and reputation. However, government support must still be based on the existence of
organizational innovation as a contemporary renewal of management, which usually must meet
parameters such as feasibility studies to be carried out, communication procedures with customers,
technology adoption procedures, cost control, quality control and product/service design, and
instilling organizational values (Carayannis et al., 2015).

The technopreneurs' hard work to create and capture economic value through exploration and
exploitation should be supported by the government through incentives to foster, secure and
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accelerate the creation and the sustainability of growth of high-tech new innovations (Blanco,
2007) whose assumptions are based on sustainable innovations of technopreneurs in Indonesia in
the creative economy market will increase the active participation of industries and small-and-
medium-sized enterprises (SMEs). This also indicates that in increasing the number of taxpayers
and the volume of economic transactions through creative economic markets and their derivative
transactions must be through government support, including the Directorate General of Taxes
(DGT). The role of government in the creative economy shows that as a regulator that creates
order and stability, the government ought to be clear and certain for some practical results of tax
and economics law through some extent of the practice that lies on comparative tendency,
including comparison of rules within the legal system, other legal systems, and systems themselves
and philosophical tendency as the validity assertion of examined reasons, which Pound (1964)
claimed that "the rule must conform to reason, and if it does not, must be reshaped until it does, or
must have reasons made for it". Thus, the existence of clear and definite regulations will place tax
authorities who not only collect taxes but at the same time show their social goals that must be
achieved by considering the impact of the operation of the law which is always in the process of
being on society (Rahardjo, 2009c).

In fact, several experts have tried to conduct studies related to tax incentives as a tax policy tool for
stimulating, supporting, and raising the creative economy. Corchuelo and Martínez-Ros (2010)
stressed the role of the government to stimulate the use of tax incentives that not only encourage
increased R&D investment in the medium-high technology sector, but also to take advantage of
the tax benefits from SMEs. Zschau (1981) explained that tax incentives that can drive technological
innovation can consist of reducing capital gains tax rates, the institution of restricted stock options,
and tax credits for contributions to technical education and R&D. Then, Larédo, Köhler, and
Rammer (2016) proposed five types of R&D tax incentives. First, accelerated depreciation schemes
for investments (machinery, equipment, buildings, intangibles) used for R&D activities. Second,
special R&D allowances that enable firms to deduct more than 100 percent of their current eligible
R&D expenditures from their taxable income. Third, special exceptions to salary and/or social taxes
for employees in R&D activities. Fourth, tax credits, which allow firms to deduct a specific share of
their R&D expenses from their corporate tax liabilities. And fifth, patent box, which grants a lower
corporate tax rate on profits generated from patents, representing a preferential treatment of R&D
investment.

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The tax regulation that is expected to meet the requirements as tools to influence creative
economy advancement is also engulfed by Hufbauer (1981) through his idea on three pressure
points, namely the speed of the implementation of new technological innovations, the level of R&D
expenditures, and the R&D success rate. The speed of implementing new technological innovations
is the most expensive step and the most potentially detrimental factor for technopreneur can be
overcome through the following three areas: 1) fiscal policy, which is a policy to adjust government
spending with tax revenue, 2) expansion of the tax structure, which is distribution of tax burden
between each type of tax (such as income taxes, value-added tax or VAT, and excise) with groups
of taxpayers (such as individuals and companies), and 3) a detailed tax structure. Regarding R&D
expenditures, Hufbauer (1981) calls on the government to focus on tax incentives to
technopreneurs as many countries have set certain incentives, such as reducing R&D expenditures
or capitalizing and amortizing R&D expenditures for 60 months or more that are regulated in US
IRC Code Section 174, or regular reductions and an additional 50% reduction in R&D spending
over three years in Canada, or accelerated R&D capital expenditure, such as in France that allows
50% of the cost of a building to be expensed in the first year, and allow a deduction for investment
in the shares. As for the success rate of R&D is related to R&D expenditures that will be oriented
towards increasing the probability of a new product or service, and can even calculate targets for
achieving results on R&D expenditures.

The study of the need for tax facilities has also been adopted in taxation legislation in Indonesia.
Tax regulations in Indonesia allow the Income Tax facility in accordance with Law Number 7 of 1983
concerning Income Tax as amended several times, the latest by Law No. 36 of 2008 (Income Tax
Law) and Value Added Tax (VAT) facilities according to Law Number 8 of 1983 concerning Value
Added Tax (VAT) and Sales Tax on Luxury Goods as amended several times, the last being with Law
Number 42 of 2009 (VAT Law).

The regulation of Income Tax facilities must refer to Article 31A paragraph (1) of the Income Tax
Law which formulates that taxpayers who invest in certain business fields and/or in certain regions
that receive high priority on a national scale can be granted facilities taxation in the form of (1) a
reduction in net income of no more than 30% of the amount of planting carried out; (2)
accelerated depreciation and amortization; (3) longer loss compensation, but not more than ten
years; and (4) the imposition of Income Tax on dividends as referred to in Article 26 of Income Tax
Law of 10% (of which the normal rate is 20%), except if the tariff according to the applicable
bilateral tax agreement sets lower. Further provisions regarding income tax facilities related to
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technopreneurs innovation in the creative economy can be understood through the definition of
certain business fields which are declared as business sectors in the economic activity sector that
receive high priority on a national scale as formulated in Article 1 number 2 Government
Regulation No . 78 of 2019 concerning Income Tax Facilities for Investments in Certain Business
Fields and/or in Certain Regions, where one of the fields that receive facilities is programming,
consulting computer, and related activities, such as development activities video games, e-
commerce application development activities, and other computer programming activities. Other
income tax facilities in Indonesia are also provided globally to SMEs, as stipulated in Government
Regulation No. 23 of 2018 concerning Income Tax on Income from Businesses Received or
Obtained by Taxpayers who have a certain Gross Circulation, the parameters of which are
Taxpayers who have a gross circulation that does not exceed Rp.4.8 billion in one year, only subject
to final income tax of 0.5%, the longest period: seven tax years for individual taxpayers, four tax
years for corporate taxpayers in the form of cooperatives, firms or limited partnership, and three
tax years for corporate taxpayers in the form of limited liability companies.

The facilities in the VAT include the imposition of 0% tariff provided in export activities (in the form
of tangible Taxable Goods, exports of intangible Taxable Goods, and Taxable Services) as
formulated in Article 7 paragraph (2) of VAT Law, Goods and/or Services Certain parties not subject
to VAT in accordance with Article 4A paragraph (2) and paragraph (3) of VAT Law, and VAT are not
partially or wholly payable or exempt from taxation, either temporarily or permanently (for (1)
activities in certain areas or certain places within the Customs Area, (2) delivery of certain Taxable
Goods or delivery of certain Taxable Services, (3) import of certain Taxable Goods, (4) utilization of
certain Intangible Taxable Goods from outside the Customs Area within the Customs Area and (5)
utilization of certain Taxable Services from outside the Customs Area within the Customs Area) as
formulated in Article 16B paragraph (1) VAT Law.

In general, the DGT has sought to provide tax facilities to taxpayers as provided for in Article 31A
paragraph (1) of Income Tax Law, VAT Law, Government Regulation No. 78 of 2019, and
Government Regulation No. 23 of 2018. However, special tax incentives to technopreneurs in the
scope of the creative economy in Indonesia do not yet exist, even though Indonesia, which has a
population of 261.9 million, is a creative economy market share of other countries. There has been
a Circular of the Director-General of Tax Number SE-62/PJ/2013 concerning Affirmation of Taxation
Provisions for E-Commerce Transactions, but it has not yet set the definition or understanding of
the creative economy or e-commerce itself and its types, which will certainly determine the method
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the treatment and tax imposition. In fact, there is a Regulation of the Minister of Finance (PMK)
Number 210/PMK.010/2018 concerning the Tax Treatment of Trade Transactions through the
Electronic System which will take effect on April 1, 2019, but has been withdrawn before it officially
applies in accordance with the Press Release of the Ministry of Finance of the Republic of Indonesia
Number: 12/KLI/2019 dated 29 March 2019. The reasons for the withdrawal of this PMK are for the
need for more comprehensive coordination and synchronization between ministries/institutions so
that certain e-commerce arrangements can be targeted, fair, efficient and encouraging economic
ecosystem growth through input from all stakeholders.

3. Economy Repositioning Technopreneurs Innovations in Preventing Indonesian Corruption

Creativity, which is openly owned by each individual, is part of developing the perception of the
creative industry. The creative industry itself is the core of the creative economy, which is inherent
in cultural policy and economic policy, where the general goal of each is to stimulate artistic
excellence, innovation, access, identity, and diversity, and to correct market failures in stimulating
economic growth, the field work, innovation, and trade. Indeed, the two policy objects can
sometimes conflict with each other, especially in terms of cultural diversity and free trade, but
government support and attention in the form of tax incentive regulations on creative industries
can harmonize given that cultural policies have the ability to provide a rationale for fixing
economic failures (Goto, 2017), including economic inefficiencies due to corruption, as Dutta and
Sobel (2016) confirmed that corruption hurts entrepreneurship and the total impact of corruption is
clearly negative for countries with a better business climate. Regarding the dual nature of the
creative industry is reflected in its ability to directly promote the "culture industry", ie if in economic
terms it will contribute to economic development and growth efficiently, whereas if in cultural
matters it will become an activity that integrates individuals socially and culturally into people
(Turban, 2018) who want orderly, orderly and continuous change. Of course, the role of the state is
needed in integrating economic efficiency with social values in preventing corruption, one of which
must be done through the regulation of tax incentives in technopreneurs innovations, in
connection with the need for a strict mechanism in formalizing legal procedures to ensure the
accuracy of justice, preventing the occurrence of justice. subversion of justice, and minimizing
distortion of discretion by the government apparatus and courts when enforcing legislation
(Soekanto, 2010). Integration in the form of legal (formal) tax also reflects an effort to achieve the
accuracy of justice through the support of legal duties, namely harmony between legal certainty
and comparative law (Friedmann, 1990), within the scope of the creative economy that cannot be
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separated from the tendency of interaction between humans and or communities / communities
some want changes and developments and at the same time want law order and stability
(Rahardjo, 2009b).

Tax (legal) support in realizing the operation of law in society which is always in the process can be
maximized through the function of regulating it as a means to guide the community. Realization
can be through the rearrangement of the position (Kamus besar Bahasa Indonesia, 2020) of the
creative economy which so far has only been limited to an economic paradigm that relies on the
main production factors in the form of ideas, ideas, or creativity from HR in intensifying economic
value-added, which of course only places the creative economy at its output position only, has not
yet reached a good impact, especially on the problem of corruption which has undermined all
sectors in Indonesia. Output as everything produced (Lexicon, 2020) by the existence of a creative
economy, should be able to realize things such as an increase in the number of creative economy
business actors, an increase in public income, an increase in tax revenue for the country, and an
increase in GDP. While the outcome, as an impact or consequence (Lexicon, 2020) by the
existence of a creative economy, should be able to realize things such as the role of increasing the
welfare of the people, increasing taxpayer compliance, increasing legal compliance, and creating
stability and public order. A creative economy that is always in tandem with technology, whose
basic concept is indeed related to a combination of innovation factors and network influence that
always develops from the desire to facilitate the public in achieving certain goals (Gordon et al.,
2014), can increase tax compliance and reduce corruption, which in turn will increase sustainable
development (Fanea-Ivanovici et al., 2019).

Of course, good outputs and outcomes must still be based on legal certainty, but legal certainty is
still limited to formal justice, so it needs to limit substantial justice and public benefit (Sinaga &
Sinaga, 2018). The realization of the balance of legal certainty, justice, and public benefit in
repositioning the creative economy (Hermawan & Sinaga, 2020) that has the ability to prevent
corruption. That is, the repositioning of the creative economy has made the concept as a creative
activity that has added value, is efficient, organized and orderly in connecting certain goals of
producers, consumers, platforms, and regulators through the use of technology, as a means of
guiding the actors of creative economic activities to act transparently, predictive (Hughes, 2017),
and narrowing the space for poachers of economic rent and illegal business lobbying that is
detrimental to the finances/economy of the country. The creative economy reposition will have a
significant influence on each party's actions in every transaction that is carried out. Through
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regulation of tax incentives that are oriented to innovations of technopreneurs, the government
can intervene in the ideas of creative economic policy functions, and support the breadth of
capabilities, exchanges, cooperation and interactions (Edler et al., 2016) which provides conditions
for a legal framework in the form of preventing corruption that is appropriate for creating and
grow technopreneur with high growth potential without ignoring state tax revenue.

Furthermore, the position and reposition of the parties involved in the scope of the creative
economy in preventing corruption in Indonesia can be described briefly in Table 1 below:

Table 1 The Position and Reposition of the Creative Economy in Preventing Corruption in Indonesia

Position and The target user of the Technopreuners Government including

Reposition application/technology Tax authority
(1) (2) (3) (4)
Position - Key Buyers and/or Sellers of Connecting buyers and Regulatory body in
characteristics goods and services sellers, preparing access, determining facility,
networks, applications, tariffs, objects and
the latest technology, subjects of taxation.
creating and
maintaining the
consistent guidelines
and internal rules of the
creative economy
Position - The up to date currency High uncertainties in the The difference in legal
Problems conversion, data creative economy jurisdictions, the
protection, transactions market, such as the coverage areas of
that are outside the habit authentication of sellers government regulation,
of money involving state and buyers, continuous and certain taxpayer
administrators. innovations, difficulties efforts to avoid taxes
reaching all buyers and
sellers transactions that
do not violate the law,
and the use of
technology that does
not update will make
sellers and buyers leave.

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Position-Tax Income tax and VAT It is possible that in the Voluntary tax
implications recognition for buyer early stages of compliance of buyers
and/or seller investment in new and/or sellers of goods
technology, there will and services that can
still be many customers decrease or increase will
who make active be greatly influenced by
transactions, but there cooperation with
will be a huge risk of technopreneurs who
loss if they do not invest have buyers and sellers
in the latest technology. transaction data
Economic - - The price is fair, Implement a culture of Make laws that
repositioning affordable, and in actively participating in guarantee legal
accordance with the nation building, being certainty, justice and
quality. accountable, and being public benefit (Sinaga,
- Not involving brokers transparent to Wirawan & Pramugar,
who can raise prices customers for the sake 2020) which reflects an
of customer accountable, efficient
sustainability as well and healthy ecosystem
Technology - - Inputs sellers/buyers' - Strengthening data Providing tax incentives
repositioning personal data correctly storage/transaction to technopreuners so
by uploading valid systems and improving that the technology
photos and ID cards transaction services with used by buyers and
- Price and technology users sellers is always up to
specifications/quality of - Make provisions on the date and comfortable in
goods listed will make it use of the technology to doing transactions, so as
comparable be accountable and to make the economy
- All transactions have a transparent if the actively revolve
digital footprint so that transaction data is continuously
if there are legal issues, needed by tax
they can be immediately authorities or law
traced and proven enforcement
- Provides a whistle
blower system
application that can be
used by sellers/buyers
for transactions that are
considered suspicious

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Repositioning - Increasingly aware that - Make internal - Giving awards or

- preventing cooperating with rules/regulations that awards to buyers,
corruption economic rent hunters sellers and buyers who sellers, and
or making unreasonable use their technology are technopreneurs whose
transactions (mark up willing not to conduct transactions are
prices) with persons will transactions that violate innovative, transparent
harm and destroy the the law and are willing and accountable,
reputation of buyers or to be penalized-Send protected from
sellers who transact periodically suspicious perpetrators of
through the media transactions to related economic rents or
platform institutions individuals who are
- Civil transactions that - Civil transactions that detrimental to the
have open access to have open access to country's
taxation and anti- taxation and anti- finances/economy.
corruption corruption
- Initiating voluntary
sellers/buyers'
compliance to report
any transaction that is
deemed
unnatural/suspicious

E. CONCLUSION

This paper produces two main conclusions. First, the regulation of tax incentives in Indonesia is still
in general, namely the income tax and VAT which are regulated in Article 31A paragraph (1) of
Income Tax Law, VAT Law, Government Regulation No. 78 of 2019, and Government Regulation
No. 23 of 2018. Regulation of tax facilities has not directly touched the substance of the creative
economy in Indonesia which is loaded with innovations from technopreneurs which at present can
be said to be very vital, where there should be many forms of tax incentives that have been studied
and/or have been implemented successfully in several countries in the creative economy, such as
offering tax incentives to stimulate R&D, special taxation moratorium on the internet and/or special
accounting treatment (including application of accelerated depreciation methods), reduction in
capital gains tax rates, institution of restricted stock options, and tax credits for contributions to

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technical education and R&D. It is already SE-62/PJ/2013 but it has not yet set the definition or
understanding of the creative economy or e-commerce itself and its types, which will certainly
determine the method of treatment and tax imposition. There's even a PMK No. 210/PMK.010/2018
concerning Taxation Treatment of Trade Transactions through Electronic Systems that are directly
withdrawn before the official entry into force, with reasons for the need for more comprehensive
coordination and synchronization between ministries/institutions, so that it can be ensured that
appropriate e-commerce arrangements can be produced target, fair, efficient, and encourage the
growth of the economic ecosystem through input from all stakeholders.

Second, a creative economic reposition that is strengthened by tax incentives in preventing

corruption in Indonesia is conceptualized in the form of creative activities that are value-added,
efficient, orderly and orderly in connecting certain goals of sellers, buyers, technopreneurs, and
regulators through the use of technology that obtains incentives taxation in order to increase tax
compliance and narrow the space for poachers of economic rent and illegal business lobbying that
harms the country's finances/economy. It is hoped that the Creative Economy Act, in general, can
produce a balance of legal certainty, justice, and public benefit as an effort to prevent corruption,
and in particular regulations can be produced specifically for tax facilities, especially for
technopreneurs and award awards to buyers, sellers, and technopreneurs whose transactions
innovatively, transparently and accountably protected from perpetrators of economic rent or
individuals who are detrimental to the country's finances/economy.

It is hoped that for the future study, this doctrinal research can enrich empirical studies that will be
necessary for determining the effectiveness and efficiency of the role of tax incentives in
repositioning the creative economy based on corruption prevention in Indonesia.

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