"Considering the prices of goods and services provided through e-commerce platforms, the increase in value-added tax is expected to affect consumers' purchasing power and is likely to be adjusted," said Budi Primawan, secretary general of idEA.
He said that online traders, especially small and medium-sized enterprises, have been facing challenges in operational burdens and policy adaptation.
Even so, idEA said it still supports the policy while continuing to dialogue with the government to propose an approach that takes into account the business sustainability of e-commerce players, especially small and medium-sized enterprises.
"We hope that this policy will be accompanied by incentives or support programs, such as digital training or reduction of operating costs, to maintain the growth momentum of Indonesia's e-commerce industry," Budi said.
"We hope that this transition process will be smooth without weakening the e-commerce industry's huge potential as a driver of Indonesia's digital economy," he said.
Previously, Finance Minister Sri Mulyani Indrawati confirmed that the VAT will be increased to 12% next year, taking effect no later than January 1, 2025.
