Indonesia: Grab and Uber have 6mths to comply, or get out: Page 2 of 2

The taxation question

Indonesia: Grab and Uber have 6mths to comply, or get out: Page 2 of 2

Besides the public safety argument, it is also clear that the Indonesian Government wants ride-sharing transactions to be subject to taxation.
“The problem with online transportation services is that they do not pay public transport taxes,” Jakarta Transportation Agency head Andri Yansyah had told DNA earlier this year, after city authorities said they would be “keeping an eye” on Grab and Uber.
However, Grab and Uber continue to insist that they are not public transportation companies.
The tax issue is one that the Indonesian Government is trying to solve, according to Danang, and this includes figuring out how to record all the private transactions made through ride-sharing apps and then subjecting them to taxes.
Working at cross-purposes
The new ministerial decree also puts a damper on the efforts of both President Jokowi and the Communications and Information Ministry to grow Indonesia’s technology sector and to project the country as a viable destination for foreign investment and businesses.
In a recent Government Work Meeting attended by all governors and mayors, Jokowi had announced his target to improve Indonesia’s ranking in the ease of doing business from No 109 to No 40.
“We must have regulations that facilitate business players and investors to run and accelerate their business.
“We must not have regional regulations that impede this,” he said, according to an official statement released by the Secretary of Cabinet office.
However, some of his ministers seem to have taken a different approach.
The potential of the ride-sharing industry would depend on the Government creating a level playing field, according to Danang.
“Are they going to declare that all types of transportation models and businesses in this country are going to be subject to public transportation laws?” he added.
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