E-commerce players in Indonesia Request Tax Suspension

Ilustrasi (dok)

Jakarta (IndoTelko) - E-commerce and Over The Top (OTT) players are responding the government's plan to impose taxation for the business sector by requesting tax suspension.

"Frankly as a new industry and new players we hope that the government can suspend this plan (taxation). Give us time to really grow the industry and the business," said MetraPlasa CEO Aulia E Marinto to IndoTelko in a brief message on Tuesday (3/2).

Aulia said that monitoring the players in e-commerce is not enough, but the most important is that the incentive to foster interest and extensive opportunities for the seller or entrepreneur who became the mainstay of this business.
"Directly this policy will lead to a slowdown in massive industrial growth given that over 90% of e-commerce players are start-ups although owned by large investors," as predicted by Aulia.

He explained that as the manager of the Blanja.com marketplace, tax issue is not relevant because the taxes already levied as applied all this time.

"It would be a pity for the online retailers, especially when talking about the "major players". There would be no major Indonesian e-commerce players in Indonesia if the benchmark is foreign markets," Aulia explained.

In Pursue of OTT
Aulia recommends that the government must pursue tax payments from the global OTT players such as Facebook, Google, and others, rather than taxing to the local e-commerce players.

"It would be better if the government is thinking about how to get money from the global OTT. Take a look at the revenue and profit from Google and Facebook per quarter. It would be better to think about how to optimize tax revenue from players like them than the growing local e-commerce players," he said.

Aulia also said that in the current digital era, marketing prefers to advertise to major OTT players such as Facebook, Google and others.

"Please check the advertising funds flows into the global OTT. The local operators can only get peanuts from the digital advertising business, although their network is occupied. Government should focus more in targeting tax from these global OTT players rather than those who are just starting to grow such as e-commerce," he said.

The most needed by e-commerce in Indonesia is an incentive in the form of self regulated for about 10 years to develop a business while the government is also studying the industry.

"Right now we are accelerating the Small and Medium Enterprises (SMEs) to go online. These sme's players would step out of the e-commerce and just doing business as usual. In the end, this industry can be stunted and eventually foreign investors with large funds would be easily entering the market as the local players do not have bargaining power, "he said.

Already Paid
Elevenia Chief Financial Officer Lila Nirmandari admitted that her company had to pay taxes in accordance with the regulations that applied to all business enterprises

"So, we don’t have any privilege. However, if the government's intention is to impose a tax on top of the existing rules, maybe we need to first understand the reason because e-commerce business in Indonesia is still in the stage of investment, not monetize. But to grow this sector, the government should issue supporting regulations," Lila told IndoTelko, yesterday.

Lila also said that, in Elevenia marketplace if the seller is a taxable company (PKP) then they must pay taxes according to the rules. "Elevenia is paying tax from the transaction fee. That's where we get our revenue," she said.

In Indonesia, E-Commerce is now growing rapidly. The numbers of online transaction in 2015 is expected to US$ 10 billion.

Local players are also increasingly to receive funds from foreign investors. Lately, a fashion e-commerce company with a flash sale concept, VIP Plaza, announced the acquisition of series A funding from Yahoo Japan Capital in an undisclosed amount.

Funding from the Yahoo Japan subsidiary is the first in Indonesia and will be used for market expansion in Southeast Asia. When launched early last year, VIP Plaza received its investment from Cyber Agent Ventures.(es)