News that the raunchy Playboy magazine has signed a deal to produce a local edition has fuelled the controversy.
Parliament is expected to pass a new anti-pornography bill by the middle of this year but the draft legislation is proving divisive.
A series of demonstrations has taken place in the capital, Jakarta, in support of the tightening of the laws.
The head of the parliamentary committee which drafted the new legislation, Balkan Kaplale, said Indonesia was in a state of moral decline. "These are Indonesian magazines," Mr Kaplale said, spreading a selection of pornographic tabloids across the table.
"It is terrible, our poor country. We are a religious people but now Indonesia is third worst in the world for porn after Scandinavia and Russia.
"It is so easily available and it is going unchecked. That is why we need this law," he said.
Booming trade
In a narrow, busy alleyway in Jakarta's Chinatown, there are stalls selling pirated DVDs.In front of most of the stalls there is a cardboard box where the pornographic films are kept.
The DVDs are openly displayed - it is pretty graphic stuff.
Few people in Indonesia would argue against the need to control the sale of such material. And yet the proposed anti-pornography bill has come up against strong opposition.
The draft document includes articles which would make it an offence to show what it calls sensual body parts, including the navel, hips and thighs.
Those found guilty of breaking the law could face a two-year jail sentence.
Drawing the line
Husna Mulya, a women's rights activist, said the anti-pornography law had been hijacked by groups pushing a hardline conservative agenda.
"The people behind this are using religious values to make their argument, especially Muslim groups. It is not stated in the bill, but the standard being used is the standard of Sharia law.
"They say people are not dressing in line with Indonesian culture. But the fashion in Indonesia now is to wear trousers that are tight around the hips, and even traditional clothes are often designed to show off a woman's breasts," she said.
And it is not just women who are worried.
The artistic lobby is up in arms as well. The draft bill would make it illegal to record anything which portrays erotic dancing, or kissing on the lips. It would mean ground-breaking Indonesian films such as Arisan would be banned.
Arisan is a humorous take on the life of wealthy, 30-something Jakartans which addresses traditionally taboo subjects like adultery and homosexuality.
The screenplay was written by one of Indonesia's leading film critics, Joko Anwar.He said the anti-pornography bill was a dangerous and unnecessary form of artistic censorship that would hamper filmmakers' creativity.
"We are not going to make some very graphic sexual scenes because we know that it wouldn't be accepted by an Indonesian audience.
"We already have that filter ourselves so I don't think it needs to be put into law. It's not democracy. It's not about pornography, it's your freedom to express yourself," he said.
This is the crux of the current argument. How far should such freedoms be extended?
The consensus in parliament is such that the anti-pornography bill will almost certainly be passed.
The question then becomes how it will be interpreted and enforced by a notoriously corrupt legal system.
But it is perhaps an encouraging sign of Indonesia's growing democratic maturity that a piece of draft legislation is being debated in public at all.
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