Government Promises to Simplify Micro Business Licensing Process

Trade Minister Agus Suparmanto said that individual traders only needed to use their ID card to apply for the required permits to conduct trading activities through online marketplaces.

KOMPAS/PRIYOMBODO

Employees work at the Doku electronic payment company office in Jakarta, Tuesday (22/10/2019). Indonesia\'s digital economy ecosystem is maturing along with rapid growth in the country\'s digital industry. According to the 2019 SEA e-Conomy report by Google, Temasek and Bain & Company, Indonesia is the fastest-growing digital economy in Southeast Asia.

JAKARTA, KOMPAS - The Trade Ministry has promised to help micro businesses obtain permits to conduct trading activities through online marketplaces. The new regulation on the e-commerce ecosystem is expected to optimize the potential of the national digital economy.

Trade Minister Agus Suparmanto said at his office in Jakarta on Tuesday (12/10/2019) that individual traders only needed to use their ID card to apply for the required permits.

The Trade Ministry is currently formulating implementing rules for Government Regulation (PP) No. 80 of 2019 concerning trade through electronic systems, which was issued on Nov. 25. "At present, we are in the stage of discussing input from stakeholders," he said.

Some online traders are worried they will have difficulty meeting the stipulations set out in PP No. 80/2019. According to the regulation, every trader conducting online trading activities is obliged to obtain a business permit, technical permit, company registration certificate, tax identification number, code of ethics, and product standardization.

There is a large market potential that Indonesia must explore to develop this business.

The requirement to obtain a business permit for micro scale traders as stipulated in the regulation, according to the Trade Ministry, has been fulfilled if they have already registered as a trader or a trading organizer through online marketplaces such as Bukalapak, Tokopedia, Shopee or Lazada.

Therefore, it is easier for the government to develop and increase the capacity of micro, small and medium enterprises.

The Trade Ministry requests that e-commerce or online marketplace operators adjust their licenses to business licenses in accordance with the Indonesian Business Field Standard Classification (KBLI) 63122 Web Portal and /or Digital Platform with Commercial Purposes through the Online Single Submission (OSS) system.

At present, e-commerce operators are required to obtain different types of licenses, such as an Industrial Business License (KBLI 63122), Trade Business License (KBLI 47911-47919) or Retail Trade License.

The government hoped the regulation of online trading would maximize the benefits of the national digital economy, Agus said. "There is a large market potential that Indonesia must explore to develop this business in national and international markets."

KOMPAS/PRIYOMBODO

A worker makes tofu at a home industry in Mampang Prapatan, South Jakarta, Monday (11/11/2019). This micro, small, and medium enterprise (MSME) has not incorporated digital technology. Marketing is carried out conventionally at traditional markets in the Mampang Prapatan and Kebayoran areas.

Demand for convenience

The associate vice president for public policy and government relations of Bukalapak, Bima Laga, said that, so far, vendors or traders wanting to sell through the Bukalapak platform had to register first. He said he hoped that, if the government still insisted on registration, the requirements would not change from the existing procedure.

There are concerns among micro and small scale companies and individual traders that the procedure to obtain the permit will be complicated. If that happens, the policy will actually hamper the emergence of new entrepreneurs.

According to the chairman of the Indonesian E-Commerce Association, Ignatius Untung, PP No. 80/2019 is still too general. Many aspects still need to be detailed in implementing regulations. He said he had begun meetings with the government to provide input regarding the issuance of implementing rules.

Many aspects still need to be detailed in implementing regulations.

The owner of processed fish products producer Sipetek Food Indonesia, Aang Permana, said he needed to see the details of the implementing regulation.

Business actors hope the new regulation will not create any additional burden for them. The policy is also feared to halt the development of the rapidly growing e-commerce industry in recent years.

According to Google and Temasek\'s research, the gross value of sales of e-commerce goods in Indonesia is estimated to reach US$20.9 billion in 2019. One of the things the government needs to do is to facilitate micro businesses.

According to the Cooperatives and Small and Medium Enterprises Ministry, there are currently 64.194 million micro, small and medium-scale businesses in Indonesia. Of that number, 63.35 million units or more than 98 percent comprise micro businesses.