Indonesia needs new law for protecting e-commerce trade

JAKARTA (JP): The government has been urged to amend or create existing laws and regulations to safeguard and support trade transactions through the Internet.

Coordinating Minister for Development, Supervision and State Administrative Reforms Hartarto Sastrosoenarto said on Monday e- commerce transactions must be well-administered and regulated to ensure their legality and accountability.

"Important aspects related to e-commerce that need special attention include tax, law, customs and excise, Internet banking and finance," he said in a speech to commemorate International Telecommunications Day.

Special regulations on tax and customs and excise for electronic transactions should, for example, be created to prevent tax avoidance, he said.

"It is important to have proper and legal codification of transaction systems through electronic devises.

"An international agreement on aspects of e-commerce within countries where electronic commerce is conducted should be established," he said.

To develop technology and infrastructure to stimulate the development of e-commerce in Indonesia, foreign investment participation was needed, said Hartarto.

He said leeway would be provided to foreign companies, especially those experienced in developing electronic commerce activities.

"I promise you that the government will provide permits without hassles to prospective investors to form joint-venture companies with local companies to develop electronic commerce here."

He said he recently met some 20 prospective investors and that interest was high.

"But fulfilling this interest will most likely be carried out when the Indonesian economy has recovered," said Hartarto, who is also the chief coordinator of Telematika, a body established by the government to supervise the development of the telecommunications and information industry.

He said foreign companies were needed not only to finance the establishment of the infrastructure but also to transfer the technology.

Indonesia should immediately take steps to establish electronic commerce capability if it wanted to survive tight competition in the global era, he said.

Private local companies were encouraged to take advantage of the extensive foreign investment opportunities to negotiate with their counterparts, he said.

"Preparation for electronic commerce here is best carried out by the private sector."

He said the government through its state telecommunications company PT Telkom, along with its subsidiary PT Indosat and partners in the telecommunications joint-operation scheme, would only provide basic telecommunications infrastructure required for electronic commerce activities. (cst)