Development tax may be imposed in Riau

JAKARTA (JP): The government may impose a 10 percent development tax on hotels and restaurants in Riau province to support tourism, a minister said yesterday.

The minister of tourism, post and telecommunications, Joop Ave, said imposing the 10 percent tax in Riau would pose no problems given the province's fast growing tourism sector.

Joop said Riau had become one of Indonesia's most popular tourist destinations, with Batam island, a special industrial bonded zone in the province now turning into one of three major entry points for foreign tourists in the country.

"It's a good idea to make Riau the 11th province to collect the tax," he said after opening Golden Hotel here Saturday.

By Presidential decree, Indonesia's 10 most visited provinces have to impose a 10 percent tax on hotels and restaurants.

The provinces are North and West Sumatra, Jakarta, West, Central and East Java, Yogyakarta, Bali, North and South Sulawesi.

Twenty percent of the funds collected from this tax go to the Ministry of Tourism, Post and Telecommunications to be channeled to the Indonesian Tourism Promotion Board.

Riau has become a favorite tourist spot for people living on the province's two major islands, Batam and Bintan.

Batam, about 30 minutes by ferry from Singapore, is an important industrial zone, while Bintan island is being developed into a tourist resort.

The development of tourist facilities will enable the 120- hectare Bintan Island to cope with a million visitors a year in 2000.

Batam's Hang Nadim international airport has been upgraded to handle jumbo jets and this will further strengthen tourism.

Batam, 20 kilometers southeast of Singapore, has also been developed as a tourist area as well as an export processing or bonded industrial zone.

Hang Nadim airport has been selected as one Indonesia's seven major entry points. The other major entry points are Entikong, on the Indonesia-Malaysia border in West Kalimantan, and airports in Jakarta, Bali, Medan, Surabaya and Manado.

Soekarno-Hatta airport in Jakarta was the major entry point for foreign arrivals from January to April this year, accounting for 38.1 percent of arrivals. Next was Bali's Ngurah Rai airport (27.4 percent) and Batam island (26 percent).

The Ministry of Tourism, Post and Telecommunications has earned Rp 47.16 billion in development tax over the past three years, less than 20 percent of the targeted Rp 239.74 billion.

Many of the 10 local administrations have been reluctant to pass on 20 percent to the ministry because they did not think the promotion board did enough to bring foreign tourists to their provinces. (icn)