The Indonesian ministry in charge of SMEs has asked the tax department to scrap a proposed tax on social media users who promote their businesses online, the Jakarta Post reported.
The Cooperatives and Small and Medium Enterprises Ministry urged the Directorate General of Taxation to re-evaluate its planned tax, which it insists would hurt small businesses.
“Many who use social media for online businesses are young and creative individuals who need support from the government. Don’t let regulations hinder their businesses,” Agus Muharram, the minister’s secretary, told reporters.
He said that instead of burdening SMEs with a new tax, the government should give them incentives, such as providing access to capital to help them expand, the newspaper reported.
The tax office last week announced a plan to tax internet users who promote their businesses via social media. The tax could generate as much as IDR15.6 trillion ($1.2 billion), the government said.