E-Commerce in the Economic Policy Package XIV

The government has issued the 14th Economic Policy Package on digital economy and e-commerce on 9 November 2016. The purpose is to encourage the expansion and improvement of economic activity communities throughout Indonesia especially in young generation. The regulation set a tax payment with turnover of IDR 4.8 billion is 1%. The Coordinating Minister for Economic Affairs, Darmin Nasution said that the regulation facilitates the ease of calculation of tax payments for e-commerce in order to avoid confusion among the e-commerce entrepreneurs.

The 14th Economic Policy Package regulates about Taxation on e commerce as mentioned below:

1. Reduction of taxes for local investors who invest in start-ups.
2. Simplification of licenses/taxation procedures for start-up e-commerce with turnover of less than IDR 4.8 billion/year through the implementation of Government Regulation No. 46 Year 2013 on Income Tax on income from businesses or obtained received Taxpayer Who Has a Gross Specific Distribution, so that final income tax of only 1%.
3. Provide equal tax treatment between foreign and domestic e-commerce entrepreneurs. Foreign investor who provides services and/or content in Indonesia is obliged to fulfill all tax provisions.

The government expects to create 1,000 technopreneurs with business valuation of USD 10 billion, with the value of e-commerce to reach USD 130 billion by 2020.

Source: Summarized from Bisnis Indonesia (11 November 2016)