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