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OnlinePajak — Impact Brief

Introduction

OnlinePajak offers Indonesian individuals and enterprises free tax-filing software to prepare, pay, and file their taxes, generating revenue from selling its user base value-added services. OnlinePajak’s active users, including large Indonesian conglomerates, SMEs and micro businesses, use the company’s fee-based services such as tax payment processing, company invoice processing and invoice factoring.

By offering a modern integrated solution, OnlinePajak allows companies to receive payments faster, simplify tax compliance, and reduce the risk of being tax non- compliant. Broadly speaking, governments can raise additional funds through encouraging foreign investment and official development assistance or by increasing domestic resource mobilization. The latter approach has several advantages, including promoting local policy ownership and improving the stability of revenues through reduced dependence on foreign firms and policies. The government of Indonesia spends about 50 percent of their budget on “pro-poor” spending in health, education, social assistance & infrastructure, which means that by facilitating tax compliance, OnlinePajak should be able to boost Indonesian public revenue.

Use of GIF Funds

GIF’s investment of $1.75 million was used towards sales and marketing and product and business development.

Impact to Date

To date, OnlinePajak has 1,062,994 registered users, both individual and corporate. The OP platform has, through July 2020 processed a total of $13.9 billion in tax declarations. In Indonesia, the average time taken for a company to prepare, pay, and file taxes is estimated at 15.9 hours per month but OnlinePajak’s services can reduce that to less than 30 mins. The company estimates that a larger firm using their services can save $60,000 a year through productivity gains, $11,000 a year by reducing late payment fees, and $260,000 a year by reducing the costs of working capital financing via faster invoicing.