Govt to abolish departure tax<\/p>\n
Febiola Desy Unidjaja, Jakarta<\/p>\n
The government is drafting a presidential decree to abolish
\nthe departure tax imposed on Indonesians who wish to leave the
\ncountry, a measure that would lead to a loss of significant tax
\nrevenue but would support tourism in the region.<\/p>\n
\"It (the abolition of the departure tax) is just a matter of
\ntime,\" State Secretary Bambang Kesowo told reporters.<\/p>\n
He projected the tax would not be included in the 2005 state
\nbudget, which the government and the House of Representatives
\nwill start deliberating next week.<\/p>\n
Erman Radjaguguk, deputy cabinet secretary in charge of
\nlegislative drafting, explained that the government decided to do
\naway with the departure tax as the policy had failed to achieve
\nits original goal of discouraging Indonesians from traveling
\noverseas.<\/p>\n
\"We have yet to receive a draft (of the presidential decree)
\nfrom the State Secretary's Office, but the government plans to
\nscrap the tax as it does not stop people from traveling abroad,\"
\nErman told The Jakarta Post.<\/p>\n
The government first imposed the tax in 1994 as a measure to
\nboost tax revenue.<\/p>\n
In 1998, when the nation was mired in the worst phase of the
\neconomic crisis, the government raised the tax as part of the
\neffort to discourage people from leaving the country and taking
\ntheir money overseas.<\/p>\n
Government Regulation No. 17\/1998 increased the departure tax
\nfor air travellers by 330 percent from Rp 250,000 to Rp 1
\nmillion. It also raised the departure tax by 150 percent from Rp
\n200,000 to Rp 500,000 for those traveling overseas by sea and by
\n300 percent from Rp 50,000 to Rp 200,000 for those traveling
\noverseas by land.<\/p>\n
There are a number of occupations that are exempt from the
\ntax, such as members of the diplomatic corps, government
\nofficials traveling on official business, and members of sporting
\nand cultural missions.<\/p>\n
The policy has sparked renewed criticism lately, particularly
\nfrom the tourism industry, which sees it as a major obstacle to
\nthe growth of inter-ASEAN (Association of Southeast Asian
\nNations) tourism.<\/p>\n
The ASEAN Tourism Association (Aseanta) has a stated goal of
\nseeing the abolition of departure taxes throughout the region,
\nand plans to discuss the abolition of departure tax for
\nIndonesians at its meeting next year.<\/p>\n
With the growth in the number of no-frills airlines in the
\nregion over the past two years, airline tickets to foreign
\ndestinations have become more affordable for many Indonesians.
\nHowever, the departure tax often serves to dampen their appetites
\nfor travel as it is frequently more expensive than the airline
\nticket itself.<\/p>\n
Meanwhile, the Directorate General of Taxation at the Ministry
\nof Finance said there would be a potential revenue loss of Rp 1.2
\ntrillion if the departure tax was abolished.<\/p>\n
\"We haven't heard about the plan. But the departure tax
\nprovides potential revenue of up to Rp 1.2 trillion a year,\" Hadi
\nPurnomo, the director general of taxation, told reporters.<\/p>\n
However, Hadi asserted that overall revenue targets could
\nstill be achieved even if the departure tax was scrapped next
\nyear.<\/p>\n
For 2005, the government has targeted Rp 243 trillion in tax
\nrevenue, up from this year's target of Rp 219 trillion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-abolish-departure-tax-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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