A World Trade Organization (WTO) moratorium on charging import tariffs for intangible goods expires at the end of this year, and with just weeks to go the Indonesian government is among several looking at using the opportunity to raise revenue from imported software, ebooks and other intangibles.
Coconuts Jakarta quotes Deni Surjantoro, head of the sub-directorate of communications at the Directorate General of Customs, as explaining that the WTO moratorium has,
…already come to an end in 2017, and we believe there needs to be equality between conventional trading and online. Items and similar goods inside the country are subject to tax, but why can’t we apply them if they’re coming from abroad?
For ebooks the targetted importers will be Google Play and Kobo, as neither Apple, Amazon nor Nook service Indonesia.
I’ve not been able to confirm this yet but judging from Surjantoro’s statement it would appear that domestic ebook players like Scoop are already charging an ebook tax, so this move will help level the playing field.
There have been rumours that Amazon is looking at launching an Indonesian store, but as yet the only Amazon retail operation in SE Asia is in Singapore. The Amazon SG store is not fielding books or ebooks, and there are no verifiable reports of Amazon sounding out Indonesia publishers, so a Kindle ID store seem improbable for at least the foreseeable future.
An Apple iBooks store seems even more unlikely given Apple’s seeming indifference to ebooks these past few years. This despite the fact that SE Asia is a major Apple device buying region.
Meanwhile there is cottage industry growing up to allow Indonesians to access the US Kindle store and buy ebooks. Kindle Indonesia – no official connection to Amazon – is an example, selling Kindle devices and offering ways to get a Kindle US account to bypass Amazon’s geoblocking restrictions on Kindle store access.
All of which demonstrates demand for books and ebooks exists, but as yet few operators are rising to the opportunity.
With 132 million Indonesians connected to the internet, Indonesia is the fifth largest internet country in the world, after China, India, US and Brazil. Indonesia has more internet users than any country in Europe, with more than twice as many people connected to the internet as the UK, France or Italy, and it’s still only at 50% penetration.
As reported here yesterday, SE Asia’s digital economy is expected to exceed $200 billion by 2025.
S.E. Asia online economy growing faster than predicted. $200bn by 2025. Will publishers rise to the opportunity?
As the largest country by far in the region (260 million people, rising to 280 million by 2025) Indonesia is the economic powerhouse of SE Asia and potentially the publishing hub for the region in the next decade.