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Indonesian e-marketplaces brace for regulatory turbulence
Regulations on taxation, stamp duties and content moderation are seen as obstacles to digital economy growth.
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E-commerce players believe several recently implemented regulations will burden the industry this year as the government tightens controls on Southeast Asia’s largest digital economy. (Shutterstock.com/one photo)
E
-commerce players believe several recently implemented regulations will burden the industry this year as the government tightens controls on Southeast Asia’s largest digital economy.
Indonesian E-commerce Association (IdEA) chairman Bima Laga said on Wednesday that certain requirements under the Job Creation Law, the Stamp Duty Law, a certain government regulation (PP) and a ministerial regulation would create downside risks for e-commerce. All the laws were introduced last year except the PP, which was introduced in 2019.
Bima, speaking at an online discussion, began with the Job Creation Law – the most expansive of the four regulations – which requires e-commerce platforms to include either buyers’ citizen identification numbers (NIKs) or their tax identification numbers (NPWPs) in tax invoices. The previous regulation only accepted NPWPs.
The regulatory change was meant to give platforms more flexibility when reporting invoices, but Bima said it added another layer of the know-your-customer (KYC) process to online transactions.
“The omnibus law should be reevaluated,” he said. “We hope that we can be a part of the law’s revision process so that the regulation can be right on target.”
The government has been trying to tighten e-commerce regulations over the past year to manage the industry, whose gross merchandise value (GMV) is projected to reach US$124 billion by 2025, grabbing the majority of Southeast Asia’s projected US$309 billion internet economy GMV that year, according to a recent report.
Indonesia’s e-commerce GMV is forecast to grow 21 percent from 2020 to 2025 to $83 billion, making it a larger market than online travel, online media, transportation and food, according to the e-Conomy SEA 2020 report by Google, Temasek Holdings and Bain & Co.
