Indonesia seeks tax from OTT digital ad

Ilustrasi (dok)

JAKARTA (IndoTelko) - Ministry of Communications and Information Technology (Kemenkominfo) is now eyeing tax from digital ad transactions by the global Over The Top (OTT) players.

OTT is the player that is identical as the filler of the operator's data pipe. OTT players are regarded as a latent danger for operators because it does not emit huge investment, but make profits above the operator's network. These OTT players are Facebook, Twitter, and Google.

"Currently we are coordinating with ministries and relevant agencies to implement the tax playing field for global OTT. We want everyone to be happy. They can do business here without worries, and the government can obtain tax from their activities," said the Telecommunication and Informatics Technology Minister Rudiantara.

The Minister said that the potential transactions of the global OTT are from the digital advertising, particularly through ad sense where global players highly qualified in the billing system and the delivery of digital ads.

"When OTT create a partnership or transact an advertising business with Indonesian partners and using Rupiah then it would be taxable. We will create a regulation for legal protection. The amount of levies being is now being discussed. It can be imposed by the first quarter of 2016," he said.

Previously, during the ASEAN ICT Ministries Meeting in Vietnam (26/11), Rudiantara invites ICT ministers in Southeast Asia (ASEAN) to unite against the global OTT dominance.

"We have to stand firm against the global OTT. It can not be carried out by only seeing ASEAN as a market, "said Rudiantara.

There is an OTT who have the largest customers from the Asean countries. "If Asean have one voice, it will increase the bargaining power so it can be placed on a more balanced position. To create a win-win solution between operators and OTT," Rudiantara said.

According to the Indonesian Independent Committee of Telecommunications and Broadcasting (KITPI) stated that approximately 60% of Indonesian content market share is foreign-controlled with an average ownership above 60%.

Data from the Association of Indonesian Internet Service (APJII) Providers claimed nearly 90% of traffic escaped overseas to access the data.

Based on APJII forecast, Indonesia has contributed around Rp 15 trillion per year revenue for the foreign content players, namely Facebook about US $ 500 million, Twitter (US $ 120 million), LinkedIn (US $ 90 million), and other foreign players.

Operators must buy US $ 218 million per year of international bandwidth to serve the traffic connectivity. In terms of taxes, there is a potential that can not be gained from the foreign players amounting around Rp 10 trillion to Rp 15 trillion, according to The Center for Welfare Studies.(es)