Abolishing the departure tax is a move in the right direction

Abolishing the departure tax is a move in the right direction

Patrick Guntensperger, Jakarta

It is heartening to see that the government intends to scrap
Indonesia's departure tax. The plan to repeal that particular law
is an important step in the right direction and it is a positive
move in both a very specific sense and a general one as well.

Specifically, the planned repeal is positive because it
represents some forward thinking in the way the government plans
to generate badly needed income. It is an indication that the
thinking has expanded beyond the grab-the-money-and-run
philosophy that has so often characterized the way tax revenue
has been generated in the past.

It seems that the thinking has been, "if they can afford to
travel, they can afford to cough up some cash for the coffers".
While there is some truth to that and while the cash grab
unquestionably provides a large lump of lucre (Rp 1.2 trillion,
according to some sources), it is short term, narrow thinking. It
only takes a moment of thought to see what the inevitable results
of this particular tax have been.

A one million Rupiah departure tax won't prevent major
corporations from sending their executives on necessary
international business trips. It might curtail them somewhat, but
business will go on pretty much as usual; the tax will be seen as
a minor irritation but the executives will continue to carry on
business overseas. In other words, as far as big corporations are
concerned, it's the perfect tax; large enough to generate real
revenue, but not so high as to kill the golden goose. At the
other end of the scale, we have the private, budget conscious
traveler.

Many trips have been canceled because the R 1 million was
enough to put the entire trip outside of the travellers' reach.
The irritation and disappointment of the Indonesian private
citizens who have thus been prevented from making business or
pleasure trips is considerable but not of central concern to
those charged with developing a tax base.

The real damage is caused at the small and medium business
level. It is this sector of the economy that will create the most
jobs, fuel our economic recovery, and generate overall tax
revenue. And it is this sector of the business world that looks
at their budgets and decides against carrying their business to
the next level -- international commerce -- because of the
excessive cost of travel. The departure tax discourages the best
potential we have for growth on the international playing field.

Far from discouraging international business travel, Indonesia
should be looking for ways to bolster overseas trade and to
encourage Indonesian small and medium sized businesses to engage
in commerce with foreign companies. Trade initiatives are coming
soon, we hope, but until then, eliminating an impediment will
have a salubrious effect. Now, if only the visitor's visa policy
could be rethought as well...

On a more general level, the initiative is to be applauded,
too. It is encouraging to see an inclination towards the
elimination of rules and restrictions. This is a big improvement
over the instinctive stampede towards the enactment of new
legislation in an effort to prove the effectiveness of a
government.

It is a political instinct to offer new laws when there is a
perceived desire on the part of the public for some sort of
reform. It takes more sensitivity, planning and even courage to
consider the elimination of regulations and the repeal of laws
than it does to offer simplistic solutions by way of adding
legislation to an already murky legal system.

It would be extremely gratifying to see this initiative
develop into a trend. Nothing would be more accommodating to our
attempts at legal reform in Indonesia than a general attempt to
divest ourselves of laws that are unconstitutional, redundant,
counterproductive, unjust or just plain stupid.

Laws generally are restrictive by their very nature. Although
they are often enacted in an attempt to encourage desired
practices or behavior, the reality is that laws are a series of
"thou shall nots". Every emerging democracy should be
parsimonious in the extreme when dispensing legislation; the
temptation to over-legislate is enormous and each new law should
be seen for what it is...a restriction of one sort or another.
Each restriction should be considered carefully to ensure that
its beneficial effects outweigh the fundamentally negative effect
of reducing freedom.

More selective repeals of laws and well considered
eliminations of regulations are to be hoped for. Those of us in
the media, for example, look forward to the elimination of the
use of the Criminal Code to control the press. It would be nice
to see some of the paperwork required to accomplish simple
bureaucratic tasks fall by the wayside. The list goes on.

Let's see a lot more movement in the direction of eliminating
restrictions and repealing unnecessary laws. The additional
freedom generated by initiatives such as the one to eliminate the
departure tax is likely to give economic recovery a shot in the
arm. Surely our leaders' time and energy would be better spent
repealing that sort of constraining regulation than worrying
about introducing new laws outlawing kissing outdoors.

The writer, social and political commentator, can be reached
at ttpguntensperger@hotmail.com