Indonesia Proposes Law To Review & Tax Every Internet Application

from the that's-not-how-innovation-works dept

As has been discussed multiple times, one of the reasons why the internet has thrived (or even why the software industry has thrived) is that the barriers to entry are low. You don’t need to build a factory or get all kinds of approvals. You can just create something and go. But, perhaps not in Indonesia any more. Glyn Moody points us to a report on a proposed law in Indonesia that would first seek to tax all technology/software firms above and beyond existing taxes and (even more worrying) require anyone creating an application to get permission from the government before any application can be released. Apparently, this will apply to any application “which uses the internet to transmit voice, images, data, content based services, e-commerce, as well as other services provided through applications.” Yeah, pretty broad.

Developers in Indonesia are reasonably up in arms over this, claiming that it will devastate the industry if they have to get government permission for every app or web service they put up. The government’s defense of the law in the face of such criticism is hardly convincing:

Ministry spokesman Gatot Dewa Broto defended the proposed law in public statements, claiming it is there to ensure the laws aren’t going to be left behind once the industry takes off.

Well, yes, I guess if you put in place laws that pretty much guarantee that the industry will never take off, then, the laws won’t get left behind. But that hardly seems like a practical solution.

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Comments on “Indonesia Proposes Law To Review & Tax Every Internet Application”

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Sean T Henry (profile) says:

Re: Easy solution

One company should create a program that is used as a pass through for “to transmit voice, images, data, content based services, e-commerce, as well as other services provided through applications.”

Get that application and have all other programs send there data to and through that, leaving the part of the program that the law applies to out of the program.

Anonymous Coward says:

Based on my knowledge of SimCity 2000, this is a bad idea. You’re supposed to lower taxes on high-tech industries; they’re environmentally cleaner and more profitable than low-tech industry, so you want to attract as much of that type of business as you can.

I guess nobody involved with any government plays SimCity. Otherwise, whenever there was a shortage of fresh water, they’d just build a desalinization plant.

Christopher (profile) says:

Re: Re: Re:

Ah Ah Ah….. I know quite a few people in government who are VERY intelligent. It’s only when you get past the LOCAL (town) government level that you start to see increasing numbers of the braindead walking show up in government.

Even then, it is a wide brush that doesn’t fit everyone that you are using there.

Markku Pesonen says:

Aren't their ISP's already charging for traffic?

Telematics is a very broad term:

Seems pretty awkward to charge/tax for something which, usually, already is payed for, namely traffic. And what will the approval of software entail? Does it mean that the software code has to be inspected and checked to assure that it follows some standard? And what about existing bugs and other kinds of malicious code? Will all that become a task for a governmental department?

I don’t see the point here unless some other explanation emerges for what is scaring the pants of the Indonesian government.

I don’t think they will get much money out of it since the industry and investors will probably go elsewhere. Then how will this mainly jurisdictional apparatus benefit the taxpayers?

I don’t get the point unless there’s something like halal coding or is inspired by ACTA.

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