'Bali needs confidence not tax relief order'

Rendi A. Witular, The Jakarta Post, Jakarta

The Directorate General of Taxation has offered tax relief for the tourist industry in Bali as part of efforts to help the island recover from the devastating bombings of Oct. 12.

However, tourist-related businesses on the island coolly greeted the offer, saying it was not what they needed at this difficult time and that there was nothing left of their businesses to tax.

The director of the tax relief campaign, Nono Hanafie, said individuals and tourist-related businesses who were directly or indirectly affected by the bombings could apply for tax relief or tax amnesty at their local tax offices.

The local authorities will examine the applications to determine who deserves inclusion in the program.

Based on the recommendation of the local authorities, the tax offices will decide on the amount of tax relief or whether to grant full tax amnesty.

Tax relief will apply for income taxes for October to December this year.

"We expect the policy to help ease the burden of the victims and to help revive Bali's tourist sector," said Nono.

According to the directorate, those businesses that can qualify for the program include hotels, restaurants, travel agencies, souvenir shops and businesses providing other tourist services.

And businesses whose buildings were damaged by the bombs can apply for a reduction in their land and building taxes.

Nono also said the directorate general would postpone ongoing and planned tax audits in Bali for at least one year.

Director General of Taxation Hadi Purnomo said earlier the Bali bombings could result in loss tax revenue of up to Rp 10.8 trillion (about US$1.17 billion) for the remainder of the year.

Meanwhile, Ida Bagus Lolek, who owns a travel agency in Bali, said the tax relief program was only a temporary solution for businesses on the island.

"What we want is to repair Bali's image as a safe place to visit. If people have confidence in their safety, tourists will come. But if there is no such confidence, no visitors will come and there won't be enough income to be taxed," he said.

Ida said the government should not focus its efforts on providing "sweeteners" for tourist-related businesses.

Rather, he said the government must identify and arrest those responsible for the attack in order to repair confidence.

"We will welcome and talk about tax relief and amnesty and other recovery policies after we are sure that the government has been able to win the confidence and trust of the international world in their safety here," Ida said.

The government introduced on Friday a special program to repair Bali's tourist industry following the terrorist attack. The program includes efforts by the government to encourage locals to visit the island to offset the decline in the number of international visitors.

The government will ask state-owned airline Garuda Indonesia to provide promotional packages for domestic tourists.