The Jakarta Post
The foreign providers of over-the-top (OTT) applications running on Indonesia's local network must prepare additional investment as a new regulation is being written, obliging them to register as a local entity with sole ownership or through a joint-venture with local partners.
Information and Technology Minister Rudiantara said there were four aspects that would be covered in the upcoming regulation, namely customer service, costumer protection, compliance and a level playing field. With the establishment of a legal entity in Indonesia, it would be easier to handle any disputes or infringements that might appear in the future.
"The government doesn't't want Indonesia to left behind in technology and investment, but at the same time we want to protect Indonesian consumers. Remember, Indonesia is not the only one asking for this. It also applied in Europe," he told thejakartapost.com on Tuesday, adding that the rule was expected to be issued this month.
In Feb. 24, France asked for EUR 1.6 billion in unpaid taxes from Google. Previously in January, Italy requested around EUR 2.27 billion in tax from Google as well. In 2012, France pressed Amazon for around US$2.52 billion.
Rudiantara further said that President Joko 'Jokowi' Widodo had informed major information and technology companies of the plan during his visit to Silicon Valley, the US.
Some OTT services such as LINE and Blackberry had already responded positively to the measure, he said. Indonesia is the largest market of Korean-owned LINE, with 30 million users, while Blackberry's service has long been well received in Indonesia.
"Digital advertising reached $800 million last year. It is really big. Why should the government tax the locals but let the foreigners eat a free lunch?" Rudiantara argued.
The minister, he continued, must ensure that there was a level playing field for both foreign and local OTT service providers. Several local OTT services were planning their launch shortly, and they would be working with the operators. (ags)(+)
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