eCommerce Association request Tax Suspension for StartUp

Daniel Tumiwa (dok)

JAKARTA (IndoTelko) - Indonesian eCommerce Association (IDEA) asked the government to provide tax suspension for startups in the online trading for less than three years so that the players can develop their business and contribute to the economy.

"In overseas, StartUps are exempted to the tax burden for five years. We are only proposing for three years, if in the future the startups can not develop its business, it's better to shut down their business and find another business, "said IDEA Chairman Daniel Tumiwa in Jakarta, Tuesday (12/5).

He explained that prior to the tax suspension imposed, first the government should institutionalize the startup term to create a mutually agreed criteria and should be incorporated.

"Later we will encourage to be incorporated, it can be in the form of limited liability company or limited partnership business entity (commanditaire vennootschap/CV). So everyone is running the business administration, but the tax is suspended. They have no power to take care to take care of financial issues during the initial process," he explained.

Daniel added that for individual sellers who indulge in social media or open a shop in the market place, should be treated like an informal sellers in the real world.

"Warteg (Local food vendor) or fried rice seller, are they taxable? They’re not, right? But they have a large turnover, it is reasonable to be taxed. However, in order to pursue their tax affairs is not the task of the platform managing, because we are not tax police. The platform owner must pay taxes, because it has become a business entity," he explained.

As known, the tax issue became one of the hot topics discussed in the national eCommerce roadmap that is being drafted by the government.

Several agencies involved are the Ministry of Communications and Information Technology (Kemenkominfo), Ministry of Finance, Ministry of Commerce, Ministry of Transportation, the Investment Coordinating Board, and the Creative Economy Agency (BEK).

The Government is reviewing the incentive for eCommerce in Indonesia so that the next 10 years could contribute around 8% for the total national trade.

According to the Directorate General's circular letter No. SE-62 / PJ / 2013 and SE-06 / PJ / 2015 said that the government would impose a tax on transactions in the online marketplace, classified ads, daily deals and online retail.

Furthermore IDEA proposed a tax holiday for online transactions within a specified period. Besides IDEA also requested to have no discrimination between online taxes and offline or it should have the same tax invoice.

"We are also encouraged to individual seller to issue a tax invoice and Taxpayer Identification Number (NPWP) database to be can be accessed by the organizers of an online transaction for the seller verification requirements. Currently we consider the Taxpayer Identification on the protection for consumers. Lastly, we are proposing this tax affairs eCommmerce no law or special regulation, "he concluded.

Just to note, there are currently 73 million active users of the internet which 7% were familiar with eCommerce. The value of transactions in 2014 is amounted to US $ 12 billion and in the 2016 is estimated to reach US $ 24 billion.(es)