Valuation of PT Vale Indonesia TBK (IDX: INCO) using Discounted Cash Flow with Free Cash Flow to Equity Approach

Abstract

This study shows that the e-commerce sector’s VAT collection policy was effective in increasing tax revenue. During the 2019–2021 period, the VAT buoyancy coefficient was 5.768, the elasticity coefficient was 4.158, and the discretionary policy effect coefficient was 1.670. The potential VAT revenue from e-commerce transactions was projected to reach IDR 56.49 trillion in 2022 and IDR 73.93 trillion in 2023. These findings indicate that e-commerce transactions have substantial potential to increase Indonesia’s VAT revenue and tax ratio. The Directorate General of Taxes (DGT) is advised to strengthen the e-commerce VAT collection strategy through improved utilization of transaction data, coordination with marketplaces, the Ministry of Communication and Digital Affairs (Kementerian Komunikasi dan Digital [Kominfo]), Bank Indonesia, and financial institutions, as well as through the simplification of tax administration procedures. Future research is expected to incorporate more diverse periods and variables to improve the accuracy of measuring tax policy effectiveness and projecting e-commerce tax revenue potential.