JAKARTA: The volume of e-commerce transactions in Indonesia is still relatively small but the government is taking anticipatory steps in the face of e-commerce industry growth as it is developing as a global trade model.
Indonesias e-commerce transactions still account for about one to two percent of retailer transactions or much lower than the global average of eight percent. However, it is predicted that e-commerce transactions in Indonesia will increase drastically from US$12 billion in 2014 to about US$24.6 billion this year.
Therefore, the government sees that the e-commerce industry is one of the business sectors that has good prospects in the future, and for this it is issuing an e-commerce development roadmap through an economic policy package. The roadmap is appearing in the 14th economic policy package announced by the government on Thursday, November 10, 2016.
“The policy package is aimed at encouraging people all over Indonesia to expand their economic activities efficiently and to connect them to the rest of the world. With this roadmap, they will be able to enhance their business in a better way,” Coordinating Minister for Economic Affairs Darmin Nasution said while announcing the package at the Presidential Office along with Communication and Information Minister Rudiantara and Cabinet Secretary Pramono Anung. Therefore, the next economic policy package is expected to sufficiently address the issue.
“E-commerce should not be treated as a general form of trading. The tariff should be lower as it is a fledgling industry, an early adopter,” Industry Minister Airlangga Hartarto underlined while speaking on the sidelines of the launch of a book on “Developing Populist Economy and Winning ASEAN Economic Community” recently. Indonesian businesses hope that the tax tariff for e-commerce business will be lower than that of the non-e-commerce industry.
The Indonesian Employers Association (Apindo) hailed the issuance of the package. Businesses badly need the governments support, particularly on the fiscal system with regard to the issuance of the economic policy package on e-commerce, Fredy Ongko Saputro, chairman of Apindo for East Nusa Tenggara, said.
“The tax tariff should be lower than non-e-commerce because this is a new industry. We hope the tax traffic is set at a modest rate,” the Apindo chairman for East Nusa Tanggara, said.
The regulation to be issued would determine the success of e-commerce in Indonesia as it has the potential to guarantee the survival of fledgling businesses using e-commerce, economic observer Agustinus Prasetyantoko said, elaborating the point. Agustinus is also of the opinion that tax exemption would help boost e-commerce in the country.
“In certain cases, tax could even be abolished during the start-up phase,” he underscored.
