Jakarta. President Prabowo Subianto is preparing a regulation that would classify ride-hailing drivers as micro-entrepreneurs, potentially giving them access to government incentives and other benefits available to micro, small and medium enterprises (MSMEs), a minister said on Monday.

MSME Minister Maman Abdurrahman said the presidential regulation on the digital transportation ecosystem was expected to be finalized within a week, with only a few provisions still undergoing harmonization.

"Only a few articles remain to be harmonized and finalized. Hopefully, everything will be completed within a week," Maman said in a statement.

One provision already agreed upon by the government would classify motorcycle ride-hailing drivers as micro-enterprises, he said.

Maman said the classification was developed after the government consulted driver communities and associations over the proposed regulation.

According to the minister, recognizing drivers as micro-entrepreneurs would allow them to retain flexibility over their working hours while gaining access to government programs and incentives available to MSMEs.

"With their status as MSME entrepreneurs, our drivers will have flexibility in their working hours. They will also be able to benefit from various incentive packages available to MSMEs," Maman said.

He also sought to allay concerns that classifying drivers as micro-entrepreneurs would automatically subject ride-hailing and online taxi drivers to income tax.

Under existing tax rules, individual micro and small businesses with annual turnover of up to Rp 500 million ($28,000) are exempt from income tax on that portion of their turnover, he said.

Maman said online taxi drivers typically generate turnover of around Rp 10 million to Rp 15 million, although he did not specify whether that figure was monthly or annual.

The micro-business classification is also expected to give drivers greater opportunities to strengthen their economic capacity, including by owning vehicles as productive assets, according to Maman.

The government wants drivers to be regarded not only as partners providing transportation services through digital platforms, but also as entrepreneurs capable of expanding their businesses and becoming more economically independent.

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