Boosting and Sparkling E-Commerce in Indonesia

President Joko "Jokowi" Widodo has signed the long-awaited e-commerce road map that will provide guidelines for the country's digital economy sector. The roadmap was expected to be issued at the end of this year and would not only regulate technology, but also cover issues such as logistics, cyber securities, taxation, human resources development and consumer protection. One of the issues in the road map also relates to the payment system by implementing the National Payment Gateway (NPG), which will be under the supervision of Bank Indonesia.

As part of the roadmap's initiatives, he added, the ministry was currently designing a measure to record online transaction information from the marketplace, in coordination with the Finance Ministry, Central Statistics Agency (BPS) and Bank Indonesia. The government only need to talk to e-commerce players on how to extract the information, so we do not have to create a new system to handle the matter.

Meanwhile, Bank Indonesia Governor Agus Martowardojo said e-commerce transactions in the country amounted to US$5.6 billion in 2016, indicating huge potential for online retail in Southeast Asia's largest country. "The great activity in Indonesia's online business is in line with the activity of Indonesians in social media. Jakarta is even known as the 'Twitter capital of the world'," said Agus on Wednesday.
 
Citing data from market research firm Statista, Agus said some 24.74 million Indonesians were using the internet. The immense growth potential of the national digital economy was also indicated by 78 percent growth of the fintech industry in the last two years, he added. However, many things needed to be addressed to make online business more efficient, including the quality of internet services, where Indonesia lags behind other countries. The government must note that Indonesia had a low internet penetration rate compared to neighboring countries.

According to data from social marketing agency We Are Social, the internet penetration in Indonesia reached 51 percent in 2016, behind that of Malaysia and Thailand with 71 percent and 67 percent, respectively. The optimal utilization of the digital economy would help improve prosperity in Indonesia. If the ongoing digital revolution can be well utilized, it will lift Indonesia's annual economic growth to 7 percent, because it will increase efficiency and productivity in the country's economy.

While the government is preparing an income tax bill, an expert has suggested that the taxes from e-commerce activities should be deducted at the payment gateway to assure fairness for both the government and business people.

In the current bill, which is being discussed by the government, e-commerce transactions must be reported so that the government can calculate the amount of tax that should be paid from the transactions.

However, Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo said on Thursday the government could not collect taxes based on the transactions that had been made because not all transactions ended with payment. "We should apply the Korean system, where the authority collects the taxes in the payment gateway because e-commerce transactions are paid through online systems," Yustinus said at a seminar on taxation in Jakarta on Thursday.

Under Director General of Taxation Regulation No. SE-62/PJ/2013, the government collects income tax and value added tax (VAT) from four kinds of e-commerce: online marketplace, classified ads, daily deals and online retail.

According to the regulation, the taxes for online marketplaces and daily deals are collected from the places sellers sell their goods and from the transactions between buyers and sellers. Meanwhile, for classified ads, the taxes are collected from the places producers promote their products and for online retail the taxes are collected per the transaction between buyer and seller.

Many an economic gain will take
    
The roadmap of e-commerce in Indonesia is expected to be issued at the end of this year and won't only regulate technology, but also cover issues such as logistics, cyber securities, taxation, human resources development and consumer protection. The government policy to boost e-commerce prospects in Indonesia must be appreciated and supported, because e-commerce is a new model of business and an economic transformation in the digital era.
    
Talking about logistics which will sell through e-commerce, its will be triggered many factories production grow-up, because with the consumer of e-commerce is boderless, its must need an enough logistics supply. If the readiness of logistics supplyment doesn't prepare earlier, it will create a problem in the era of e-commerce. Research and development institute and university in Indonesia must be turned their grand plan strategy to responds e-commerce era with the strategy to improve human resource development whom have high skill to compete in the era of e-commerce, because if they don't respond it, the university graduates has un-employeed communities and it will burden for the government and the future of Indonesia.
    
Discussing about cyber securities in Indonesia, we are understand that matter is still a problem in Indonesia. Many of people in Indonesia has been skepticed about the strengh of cyber securities system in Indonesia because in Europe, Japan, and America which have a high level of cyber securities system has easy taken cyber attacks such as ransomware which has been made panic situation in all of countries had been taken strikes. Without modification and improvement on cyber securities in Indonesia, e-commerce era in Indonesia has been take a seriously challenge and threat such as the lose of data consumer, banking fraud trough cyber attacks, supply chain sabotage through cyber systems etc and finally we will fail to protect consumer.
    
However, if all of obstacle related to e-commerce business prospect can be solved, e-commerce era will be made many an economic gain for Indonesia such as the rising taxes, creating and absorbing many of employee in Indonesia, rising Indonesia's gross domestic bruto through e-commerce, an economic wheel in Indonesia will run more faster than ever and finally we can provide the prosperity and security for all of Indonesian people. Hopefully.
    
*) The author had earned his master at the University of Indonesia (UI).