Market MSME Traders Senen Value Thrifting Does Not Disturb Sales, Government Reviews Economic Impacts-Regulation

JAKARTA - The activity of trading used clothing at Pasar Senen has returned to the spotlight after the Minister of Cooperatives and SMEs Maman Abdurachman directly inspected the sales center in the midst of the polemic of legality importing used clothing.

During a visit with Member of the Indonesian Parliament Adian Napitupulu, Maman stated that the government was reviewing regulatory solutions for the thrifting sector, especially related to legal status and its contribution to the MSME ecosystem.

"We are looking for a solution. So far, traders are considered illegal according to the rules," he said in a written statement received by VOI, Sunday, November 30.

The Thrifting Association asked the government to provide certainty of distribution through official import quotas.

They assessed that sudden suspension of supply could disrupt the economic cycle of traders, especially ahead of the peak year-end demand.

"The goods are almost empty. We need a quota to keep the distribution running," said the association representative, Rifai.

A number of traders said their activities contributed to state revenue through taxes, as well as taking advantage of formal financing such as People's Business Credit (KUR). This is considered to show the closeness of the third sector to the MSME ecosystem.

Adian Napitupulu emphasized that the government has a history of collecting taxes from used imported clothing through PMK 132/2015 at a rate of 15'30 percent before the regulation is lifted.

He said that the Thrifting traders who sell online are also currently subject to 11 percent VAT.

"This means that this sector has the potential for state revenue if it is regulated properly," said Adian.

Local product traders at Pasar Senen assessed that the presence of Thrifting did not interfere with their sales.

According to traders, the two segments have different market targets, while local production has a higher price due to its own production costs.

"We are not disturbed. The market is different," said one of the MSME traders.

The Ministry of Cooperatives and SMEs will continue to study related to the economic impact of thrifting, including potential state revenues, the sustainability of local MSMEs, as well as the mechanism for monitoring imports.