JAKARTA: With other Southeast Asian countries already having prepared the ground for the digital economy to prosper, the Indonesian government has finally taken the initiative to spur the growth of e-commerce within its own boarders.
Announced on Thursday evening, the 14th economic policy package will tackle eight issues that could determine the success of President Joko “Jokowi” Widodo’s goal of turning Indonesia into the biggest digital economy of the region by 2020 with a targeted value of US$130 billion. The eight issues are funding, taxation, consumer protection, human resources, logistics, communication infrastructure, cyber security and the establishment of a project management office.
The government expects the new policy package, dubbed the e-commerce road map, to create 1,000 “techno-preneurs” with businesses that have a total value of $10 billion by 2020.
Coordinating Economic Minister Darmin Nasution said the e-commerce road map, which will be translated into a presidential decree, was essential to boost connectivity and efficiency in the industry.
The government also expects the road map to better protect national interests and give priority to small and medium-sized enterprises and start-ups.
“We also want to boost creative innovation and invention of new economic activities, especially for youths who enjoy playing around with new things,” he said during a press conference to unveil the package on Thursday.
Indonesia’s e-commerce market is estimated to be worth Rp 18 trillion ($1.4 billion) as of 2015, with 37 million consumers from a total population of 255 million, according to World Economic Outlook data compiled by the Internet Service Providers Association. The association expects the e-commerce market will be worth Rp 25 trillion by 2016, with 49 million consumers.
Meanwhile, Communications and Information Minister Rudiantara presented some details of the road map, which includes grants or subsidies to help start-ups boost their chances of surviving in the tough e-commerce industry.
The government also aims to reduce taxes for locals investing in start-ups and simplify taxation procedures for e-commerce start-ups with a turnover of less than Rp 4.8 billion a year, so that the final income tax will only come to 1 percent.
