Exit tax burdens small businesses

JAKARTA (JP): Exit taxes imposed on Indonesians traveling abroad are particularly a burden on small-scale businessmen looking to promote exports and students pursuing education in foreign countries, according to an analyst.

Director of the Indonesian Business Data Center Christianto Wibisono said in a seminar on youth tourism held at the Ministry of Tourism, Post and Telecommunications yesterday that small- scale businessmen who visit overseas countries frequently have to allocate money for the tax which they should be able to use to improve the competitiveness of their products overseas.

"The justification for the exit tax has become questionable as the government plans to exempt people traveling within the economic growth areas of the Association of Southeast Asian Nations (ASEAN) from the regulation," he said.

The government announced last month that the planned exemption in the growth areas is expected to encourage Indonesian travelers to go to other ASEAN members involved in the growth areas.

The exemption, based on Government Regulation No. 57/1996, has not been made effective yet.

Eighteen Indonesian provinces are included in one of the three subregional economic cooperation areas, or growth triangles, which link all ASEAN countries except Vietnam. These areas are the Indonesia-Malaysia-Thailand Growth Triangle, the Indonesia- Malaysia-Singapore Growth Triangle and the Brunei-Indonesia- Malaysia-Philippines East ASEAN Growth Area.

To support the new regulation, Riau Governor Suripto proposed yesterday that the government should declare Riau's four seaports, Dumai, Tanjung Pinang, Tanjung Balai Karimun and Selat Panjang, as gateways for travelers to be exempted from exit tax under Government Regulation No. 57/1996.

Based on Government Regulation No. 10/1994, Indonesians leaving the country through airports are required to pay Rp 250,000 (US$107) and those leaving through seaports are charged Rp 100,000.

Christianto said yesterday that on account of the planned exit tax exemption within the ASEAN economic growth areas, the government apparently plans to increase the exit tax to Rp 400,000 at airports outside the growth areas. (icn)