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Govt backtracks on OTT companies
The government has changed its mind regarding a requirement on over-the-top (OTT) companies, providing more leniency for them instead.
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Communications and Information Minister Rudiantara (second right) welcomes guest at his official residence in Jakarta on the first day of Idul Fitri on Wednesday. (The Jakarta Post/mos)
T
he government has changed its mind regarding a requirement on over-the-top (OTT) companies, providing more leniency for them instead.
Communications and Information Minister Rudiantara said Wednesday that a draft ministerial decree on OTT content providers would not oblige them to establish their own local entity or create joint ventures with local firms.
Rudiantara said the upcoming regulation would only advise those companies to partner with local telecommunications operators to address three issues: customer service, customer data protection and a level playing field.
The move contrasts starkly with a previous plan by the government to force foreign OTT companies to either have their own local entity, establish joint ventures with local firms or partner with local telecommunications firms.
“It will be enough that any possible disputes or infringements in the future be addressed to local telecommunications providers that have forged cooperation with a foreign OTT company,” Rudiantara told reporters on the sidelines of an open house event at his official residence in Kuningan, South Jakarta.
The previous plan aimed to recover millions of dollars in lost taxes because foreign companies without local entities are not obliged to comply with the country’s taxation system.
Rudiantara said foreign OTT companies would be allowed to operate their business in the country as long as they complied with “prevailing taxation regulations” on income tax and value-added tax.
He fell short of explaining the details.
“I have met with Finance Minister Bambang Brodjonegoro. We have come to a conclusion that the taxation issue will be managed further by the Finance Ministry,” Rudiantara said. (mos) (tas)
