The Government Delays Indonesia’s E-Commerce Roadmap Launching

Initially, the government planned on unveiling the roadmap of e-commerce in Indonesia by the end of this month. Unfortunately, the schedule seems a bit off, as there are still few issues that linger, such as the taxation and funding-related ones.

The roadmap, which was firstly coined last February, involves eight ministries, namely the Ministry of Communication and Information, Ministry of Trade, Ministry of Finance, Ministry of Transportation, Investment Coordinating Board, and Creative Economy Agency.

“This roadmap involves eight ministries. It was initially planned to be launched by the end of August, but unfortunately we cannot be sure whether it will be delivered on time or not. Have patience, we’ve done it since February and it’s almost completed,” said the Minister of Communication and Information Rudiantara.

According to him, taxation and funding issues are two most annoying challenges to the roadmap finalization.

“E-commerce will find it difficult to pay 10 percent of each transaction, so we the option would be to make it similar to tax in the market, so it might be in form of market tax,” he added.

Further, he also admitted that regulating the tax for e-commerce industry is more challenging, as it’s much more complicated than regulating offline businesses. Another issue that emerges refers to funding, as the government is currently discussing about the source of capital that online SMEs may pursue, such as soft loan program or government’s budget for instance.

One missing thing to this concept is that any banking-related solution is blocked by regulation, as there is currently no program that covers online businesses.

“The Public Business Credit can only be used for physical businesses. Unfortunately, e-commerce doesn’t have physical goods, and that’s what makes banks hesitate to take part. This situation needs serious socialization,” he explained.

Besides finalizing the roadmap, the government is also currently preparing the Bill of E-commerce to manage and protect the players of local e-commerce industry. This, along with infrastructure establishment, are the ministry’s two main focus.