TikTok, YouTube, Meta eye Indonesia e-commerce licenses

TikTok and YouTube are considering joining Meta in applying for e-commerce licenses in Indonesia after Southeast Asia's largest economy banned online shopping on social media platforms, people familiar with the discussions said.  

Indonesia's trade ministry banned e-commerce transactions on social media a month ago, saying it sought to protect small and midsize offline merchants and marketplaces, and to ensure users' data was protected. 

With a population of more than 270 million, Indonesia generated nearly $52 billion in e-commerce transactions last year, according to data from consultancy Momentum Works. 

The law was a particular blow to TikTok, which had pledged in June to invest billions of dollars in Southeast Asia, mainly in Indonesia where it has a base of 125 million users, in a major push to build its e-commerce service TikTok Shop. 

The app, owned by Chinese technology giant Bytedance, plans to apply for an e-commerce license and is exploring the best path to do so, three people familiar with the matter told Reuters. 

TikTok is holding talks for potential partnerships with local e-commerce players, including GoTo's Tokopedia, while building a standalone TikTok Shop app for Indonesia, the people said. 

Until TikTok Shop stopped operations in Indonesia this month, it was delivering about 3 million parcels a day in Indonesia, two sources said. 

TikTok said it could neither confirm nor deny it was considering seeking a license. Tokopedia did not immediately respond to requests for comment. 

Alphabet's (GOOGL.O) YouTube is also planning to apply for an e-commerce license, two sources said, without specifying the type of permit planned. YouTube introduced in the U.S. a shopping service for creators to promote products and brands on the platform. 

A spokesperson for the company declined to comment. 

TikTok and YouTube's plans to apply for e-commerce permits in Indonesia have not been previously reported. 

Facebook and Instagram owner Meta Platforms applied this month for a type of e-commerce license allowing the promotion of goods on its platforms but no direct e-commerce transactions, said the Indonesian trade ministry's director general of domestic trade, Isy Karim. 

The permit would enable vendors to advertise goods and do market surveys but no in-app transactions, Isy said, adding that Meta is seeking the permit for its Facebook, WhatsApp and Instagram apps. 

Meta did not respond to requests for comment. 

YouTube and TikTok have not approached authorities about applying, Isy said. If TikTok were to apply, he said, it would have to be a domestic unit of the company. 

Source: Reuters 

Jokowi Introduces New Property Tax Incentives to Boost Indonesian Economy

President Joko "Jokowi" Widodo unveiled new tax breaks for property purchases to invigorate the country's housing sector, in a bid to bolster Indonesia's resilience against the uncertain global economy. 

The government has decided to waive the value-added tax (VAT) on home purchases priced up to Rp 2 billion ($126,000) until June 2024. From June onwards and through the end of the year, a 50 percent discount on the VAT will be applied to these purchases. 

Addressing the BNI Investor Daily Summit 2023 on Tuesday, President Jokowi stated, “Our goal is to incentivize the property sector to sustain our economic growth.” 

Southeast Asia's largest economy, Indonesia, has consistently registered growth above 5 percent in recent quarters. The nation has also posted trade surpluses and maintained a positive state budget this year. However, the massive withdrawal of foreign funds, reminiscent of patterns observed prior to past economic downturns in Indonesia, remains a concern. 

"Capital outflows are predominantly moving towards the United States, complicating the economic scenario," remarked Jokowi. 

The ongoing conflicts in Russia, Ukraine, and more recently between Israel and Hamas further threaten global stability, potentially driving up world oil prices. Jokowi emphasized the gravity of the situation, noting that an escalation, especially in regions like Lebanon, Syria, and Iraq, would significantly disrupt the global economy due to potential spikes in oil prices. 

Considering these global tensions, Jokowi stressed the need to fortify Indonesia's domestic economy. The property and construction sectors are of particular concern as they contribute between 14 and 16 percent of the GDP and generate significant revenue for both central and local governments. 

Details on the Tax Incentives  

"Our goal is to stimulate our economy by offering incentives for the housing and property sectors. The property industry has extensive ripple effects, impacting 114 associated industries, including those producing sand, cement, doors, glass, ceramics, and many others," Jokowi said. 

Later on Tuesday, President Jokowi chaired a meeting that outlined a series of fiscal incentives targeting the property sector. The central feature of this initiative is the full absorption of VAT by the government on new home purchases below Rp 2 billion until June 2024. After this period, the government will cover 50 percent of the VAT, a strategic reduction designed to maintain market dynamics while ensuring fiscal responsibility. 

Additionally, subsidies have been allocated to support low-income families. These grants, totaling Rp 4 million, cover administrative expenses related to home purchases, including the buyer's property transfer tax (BPHTB), and are available until 2024. The government has yet to announce when the new tax incentive will be effective. 

Optimism in the Property Sector 

Rusmin Lawin, a deputy chairman of Real Estate Indonesia (REI), expressed enthusiasm about the new measures. He believes that these incentives, which have been sought for the past five years, can significantly bolster property sales. Highlighting the government's recent decision to allow property sales to foreigners, Rusmin said, “I am optimistic that our sales could increase by 50 percent next year.” 

Rusmin also identified a growth potential in homes priced between Rp 200 million and Rp 1 billion, which is higher than the heavily subsidized segment targeting low-income families. The tax relief means many, including government officials, military personnel, and millennials in the private sector, can now aspire to buy their first homes. 

Currently, an 11 percent VAT is levied on any house purchase in Indonesia, posing a substantial hurdle for first-time buyers. 

In response to Jokowi's announcement, several property companies witnessed a surge in their stock prices on the Indonesia Stock Exchange on Tuesday. For instance, Alam Sutera Realty stocks rose by 1.8 percent, while Ciputra Development saw a 3.5 percent increase. The property sector drove the benchmark index, which closed 0.9 percent higher. 

Source: Jakarta Globe 

Prabowo-Gibran ticket register 2024 candidacy 

Defense Minister and Gerindra Party chair Prabowo Subianto threw his hat in the ring for the 2024 presidential election on Wednesday, the final day of the weeklong candidate registration period, with Surakarta Mayor and First Son Gibran Rakabuming Raka as his running mate.  

“[If elected], we will make Indonesia an advanced and prosperous country,” Prabowo said after registering with the General Elections Commission (KPU).  

“We want a fair, peaceful election. We will compete by offering ideas, visions and programs,” he added. 

KPU chair Hasyim Asy’ari said both Prabowo and Gibran were scheduled to undergo their mandatory medical checkups on Thursday at the Gatot Subroto Army Hospital in Jakarta. 

The candidate pair of the Onward Indonesia Coalition (KIM), the largest electoral alliance heading into the February 2024 polls, registered on the last day of the registration period as the final of three candidate pairs to do so.  

Their candidacy all but ensures that next year’s presidential election will be a three-horse race.  

Earlier on Wednesday, Prabowo and Gibran greeted supporters at the Gelora Bung Karno Sports Complex, where they also unveiled their campaign platform.  

The rally was also attended by the chairs of the nine parties that make up the Gerindra-led KIM.  

Also seen during the event were Deputy State-Owned Enterprises (SOEs) Minister Rosan Roeslani and Investment Minister Bahlil Lahadalia. Rosan is to serve as the Prabowo-Gibran campaign manager, though it remains unclear whether Bahlil will have a formal post on the campaign team. 

Prabowo told supporters that he would work toward eliminating poverty, hunger and malnutrition in children. 

Gibran, the eldest son of President Joko “Jokowi” Widodo, opened his speech by telling Prabowo “not to worry, I am here”, in a nod to the fact that Wednesday’s rally was their first public appearance as a presidential ticket.  

The 36-year-old Surakarta mayor said that if elected, the pair would provide loans for digital start-ups and continue President Jokowi’s ambition to develop the minerals downstream industry and the green economy.  

The two then joined a march with thousands of their supporters and headed to Suropati Park in Central Jakarta, before registering their candidacy with the KPU. Hundreds of members from ProJo, the largest Jokowi supporters’ group, were visibly recognizable in the march from their red attire.  

Speculation over a potential Prabowo-Gibran pairing had long been stirring, but only came to fruition at the eleventh hour thanks to a controversial Constitutional Court ruling last week, which extended the age of candidacy to include elected officials under the age of 40. 

The ruling has been widely lambasted by critics, including many of Jokowi’s most ardent supporters who have accused the President of trying to build a political dynasty.  

According to the latest opinion polls, the Prabowo-Gibran pair’s biggest rival is former governor Ganjar Pranowo, who hails from the Indonesian Democratic Party of Struggle (PDI-P), the political vehicle of the President and his family for two decades. 

Ganjar and his running mate, Coordinating Political, Legal and Security Affairs Minister Mahfud MD, registered their candidacy on Oct. 19, just hours after former Jakarta governor Anies Baswedan and his running mate, National Awakening Party (PKB) chair Muhaimin Iskandar, had registered.  

Gibran was elected in 2020 on the PDI-P ticket as Surakarta mayor, a position once held by his father.  

PDI-P executives have expressed their disappointment with Gibran for going rogue, but the party has so far hesitated to sanction him. 

Source: The Jakarta Post