March 17, 2021 | Invest Indonesia

Finance Minister Stresses Need for Regulating Digital Transactions

Source from: Antara News

Original News HERE

The rise in digital transactions following vast developments in technology requires a further formulation of rules to reduce potential risks, Finance Minister Sri Mulyani Indrawati has said.

“At least there are four reasons why digital transactions need some rules,” Indrawati observed at the International Conference on Digital Transformation in Customs here on Tuesday.

The first reason is — to have a good record on digital transactions in Indonesia, she stated.

The imposition of import duties and requirements for businesspersons to report digital transactions would create a more accurate trade statistic, which would help the authorities to take further policy action, she explained.

Second, digital transactions are considered to have a high risk of misappropriation or illegal dealings, so the government needs to strictly monitor them, the minister said.

The technology of 3D-printing that has gained popularity recently could allow users to produce goods that can potentially harm the public, she noted.

Thus, the digital transaction mechanism could open the chance for tax fraud, intellectual property rights violation, and money laundering, she pointed out.

Third, the imposition of the digital transaction tax would guarantee a level playing field between conventional and digital traders, Indrawati stated.

The minister admitted that conventional traders have complained of unfair tax imposition between conventional and online traders.

“This is a challenge for us to create a fair playing field for all players. Imported films, video games, and other digital products should be treated fairly with printed books,” she said.

Four, the imposition of import levies on digital products sent via electronic transmission is aimed at avoiding potential loss to the state revenue, Indrawati said.

“Economic and digital transactions would erode the conventional tax basis, hence the government should be able to adapt to the new trend,” she added.

Reporter: Astrid FH, Sri Haryati
Editor: Fardah Assegaf, Ine