Pajak Pay Aims To Solve Indonesia’s Tax Woes, May Soon Be Available on Go-Jek

Pajak Pay Aims To Solve Indonesia’s Tax Woes, May Soon Be Available on Go-Jek

by February 13, 2018
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Indonesian companies aren’t very diligent when it comes to paying taxes. Instead of filling the state’s accounts, profits go unreported or are stashed in tax havens offshore. In 2016, the government implemented a tax amnesty program, attempting to lure money back into the country, with some success.

There are many reasons why Indonesians dodge taxes – lack of trust in the government is one. Another is the tax filing hassle: it’s a lot of paperwork, and payment can only be made through accredited banks. Granted, that problem isn’t unique to Indonesia. And just like in other countries, people are trying to fix this with software.

OnlinePajak is currently the leading solution in Indonesia, with 500,000 users. Last year, it contributed 4% of the government’s total tax collection, says founder Charles Guinot. It launched in 2015. The basic software is free, but it has a premium component with additional benefits for larger companies.

The startup is interesting from a fintech perspective because of its recently launched feature PajakPay. This allows users to settle their tax bills directly through the software – eliminating the need to settle the bill in a separate process. That’s a first in Indonesia, claims Guinot, and it took “months and months” of discussions with all stakeholders to achieve this.

PajakPay’s integration doesn’t utilise and existing payment gateway or payment service provider Guinot stresses. The tech is developed in-house.

Originally from France, Guinot came to Indonesia six years ago as part of an expansion plan of French trading and manufacturing company Farinia. Guinot struggled with the company’s tax reporting in Indonesia, and because he has an IT background, he set about solving it. That was the start of OnlinePajak, which he now runs while still involved in the other business.

Since its inception, OnlinePajak has worked closely with Indonesia’s tax department. The tax department has a framework that allows third party developers to link up with its system. However it took Guinot two years to get the license and software to the point where he could launch. “It takes time to build trust, to deliver the tech, to comply with the all regulations. I was spending most of my time at the tax office,” Guinot recalls.

PajakOnline’s deep integration with the tax office’s systems down to the payment part makes it an attractive partner to other software providers who target corporates and small businesses. PajakOnline’s module can be built into human resources management software, for example, and it already works with some, like Talenta.

Pajak Pay Go-Jek

Image Credit: Go-Jek

Other possible partners could be bill payments apps. Companies like Go-Jek, which has its roots in ride-hailing, and e-commerce marketplace Tokopedia already let users settle bills like electricity and health insurance through their apps. With PajakPay, this could be extended to tax payments sometime down the line.

OnlinePajak recently raised a round of investment from VC firms including Sequoia Capital, which also invests in Go-Jek and Tokopedia, and Indonesian VC Alpha JWC.

Conversion with Go-Jek and other apps will happen “for sure,” says Guinot. In November last year, Go-Jek’s CEO Nadiem Makarim told local media his firm has applied for a license which would let his firm act as a tax agent. He said Go-Jek’s database comprises 100.000 merchants ready file their taxes. However, he did not disclose whether Go-Jek plans to develop the capability itself of wants to partner with third party providers like OnlinePajak.

Featured Image Credit: Freepik.com

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  1. #2 Gold And Blockchain Use In Indonesia – 10 Pips Academy 22 July, 2018, 16:09

    […] subduing the data management crisis in the country, Online Pajak, a FinTech company, has launched a blockchain-powered application that allows the sharing of encrypted tax data with institutions such as the tax and treasury offices, banks, and the central bank. In a vastly […]

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