Indonesian demography enhances digital economy development

Indonesian demography is dominated by tech-savvy generation.

REPUBLIKA.CO.ID, JAKARTA -- Indonesia's demographics, dominated by the tech-savvy generation or those well-informed about using modern technology, especially computers, have a vital role in enhancing digital economic development, Finance Minister Sri Mulyani Indrawati said. She explained in order to support digital economics, the government is currently building satellites to strengthen connectivity across Indonesia.

"Business trends are changing. Many conventional companies are migrating to or developing their business to digital commerce. Hence, we continue to communicate with these companies, such as retail or digital market places, to get inputs on their business models and what needs to be adjusted regarding taxation," Indrawati remarked here on Monday.

According to the minister, in terms of tax payment, conventional business groups are of the view that digital business players do not pay tax.

"However, it is not true. They still pay taxes. Founders of the digital platform also have competitors among them. If this platform business actor is pushed, he/she will move to Facebook or Instagram," she added.

According to Indrawati, transactions have now become increasingly individual. However, transactions in the world can be easily detected.

"In the case of tax evasion, for instance, the world has the opportunity to prevent profit shifting. Other countries do not want that. Digital economy is going to be here, to stay, and even to grow," she emphasized.

Indrawati pointed out that the government's focus is not only on taxes but also problems that should be dealt with in future, including super correction, money laundering, and terrorism financing.

"The government continues to support innovation and provide protection against the digital economy sector," she stated.

Indrawati pointed out that Indonesia had four unicorns, with valuation over US$1 billion, or some Rp13.5 trillion: online transportation service Go-Jek, ticket and hotel booking service Traveloka, and digital shopping platforms Buka Lapak and Tokopedia.

"Indonesia is able to create a global company. This is an attraction for the world's digital players to come to Indonesia. Hence, we improve this business from the policy side by providing incentives and communicating with them to continue to provide added value," she added.

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