Technological developments have created new worlds that run parallel to the real world. The new world is better known as the virtual world, which provides an experience like the real world. The virtual world, of course, also holds enormous potential because the public increasingly favors it. One possibility is taxation, which can be used to increase state revenue. However, is imposing taxes on various activities in the virtual world possible? This question triggered a discussion organized by Airlangga Institute for International Law Studies (AIILS) with the theme “Taxing Virtual World”. The activity which was held on Monday, November 28, 2022, presented Muhammad Riovano, an undergraduate student at the Faculty of Law, Airlangga University, and Muhammad Hisyam, an information system undergraduate student at the Sepuluh Nopember Institute of Technology. Also, there were Prof. Edvardas Juchnevicius from the Faculty of Law and Administration, University of Gdańsk, Poland, as the key person.
Through this opportunity, Muhammad Hisyam explained that the virtual world had been a space for the emergence of various innovations. The virtual world also holds the potential to become a field of income and investment. This is proven by the number of businesses growing virtually and new investment platforms such as cryptocurrencies and non-fungible tokens. However, it should also be remembered that the virtual world is very volatile and has risks. Of course, there are many challenges to imposing taxes on the virtual world. Moreover, the virtual world known and accessed by the public is only a tiny part of an iceberg phenomenon.
Furthermore, Muhammad Riovano then explained by starting the definition of goods according to the law in Indonesia. According to him, the definition of goods has been regulated in Article 499 Burgerlijk Wetboek (BW) as assets that can be attached to property rights. Article 503 Burgerlijk Wetboek (BW) then also expands the definition of objects that can be tangible or intangible with characteristics as a right. In its development, the virtual property should also be recognized as an item because of its economic value. Meanwhile, based on the provisions in the tax law, any object that can provide additional financial capacity is included in the income tax category. Therefore, virtual property that offers economic benefits should also be taxed.
Regarding the discussion, Prof. Edvardas Juchnevicius appreciated the discussion that had taken place even though there were differences in scientific backgrounds between the two students. He then quoted the opinion of Benjamin Franklin that there are only two things that are certain in life, namely, death and taxes. Through the latest technological developments, such as robots, virtual worlds, and virtual property, many countries still need clarification about whether to regulate, allow, or even ban. This is because imposing taxes on virtual worlds has many challenges, such as: definition, legal subject for virtual worlds, the principle ability to pay, double tax risk, adverse effects on innovation, practical implementation problems, tax avoidance problems, and international tax law issues.
