Exit tax hike hits ailing travel agencies

Exit tax hike hits ailing travel agencies

JAKARTA (JP): A 300 percent rise in departure taxes to begin
tomorrow will pose another crushing blow to the country's
battered travel industry as the measure will undoubtedly cause a
further plunge in the number of travelers going overseas.

Some travel agencies in Jakarta told The Jakarta Post the
higher departure taxes imposed on residents leaving the country
might drive them to the brink of collapse.

The head of the Jakarta branch of the Association of
Indonesian Tour and Travel Agencies (Asita), Meity Robot, said
the higher taxes would further debilitate the country's travel
industry, which last month alone saw more than a 70 percent drop
in outbound customers.

The government announced Monday a 300 percent departure tax
increase to Rp 1 million imposed on residents leaving the country
by airplane in an unprecedented move to discourage overseas
travel.

Based on Government Regulation No. 17/1998, the departure tax
imposed on residents leaving the country via seaports will
increase by 150 percent to Rp 500,000 from Rp 200,000.

Residents departing by land will have to pay Rp 200,000,
compared to a previous Rp 50,000 tax.

Meity, who is also a director of Iwata Tour and Travel Agency,
said the higher exit taxes would not only discourage overseas
travel but could also result in a further fall in foreign
visitors.

The sharp drop in the country's outbound travelers might force
foreign airlines to suspend their Indonesian flights due to a
sluggish demand for their seats, she said, adding that such
flight suspensions would consequently result in a fall in the
number of foreign visitors.

"Before the departure tax increase, many foreign and local
airlines saw a severe decrease in the number of their passengers,
forcing them to cut their services to Jakarta," she said.

She said about 80 percent of the association's 500 members of
the Jakarta branch had temporarily scaled down their operations
to cut costs.

The sharp fall in outbound customers is due to the 80 percent
fall in the rupiah's value against the American dollar.

Meity added that the number of travelers in the
December/January period, traditionally a peak season for the
travel business, had dropped sharply.

Sri Mulyono Herlambang, chairman of Asita's central executive
board, also expressed great concern, saying that more tour
operators might soon go bankrupt.

"The rupiah's turbulence and the economic crisis have already
driven 50 percent of Asita's members into bankruptcy and more may
fold up shortly after this second blow," Herlambang said.

He said the drastic rise in the exit tax would also affect
ASEAN tourism cooperation and even Indonesia's tourist promotion
efforts overseas.

Benny Rungkat, secretary-general of the Indonesian National
Air Carriers, said domestic airlines should restructure their
international routes as a result of the skyrocketing exit tax.

"This measure is rubbing salt into the wound because national
airline companies have already been hurt badly by the steep
depreciation of the rupiah against the dollar," Rungkat added.

Risnawati Saddak, a manager of Satriavi Tours and Travel,
shared Meity's view saying the higher exit taxes would slowly
kill most travel agencies.

She told the Post the measure could cause a drop in the number
of the outbound travelers by over 90 percent.

Linda Budiono of Travindo Tours and Travel said she was
surprised by the size of the rise.

"My agency has received a large number of cancellations from
tour groups and individuals since the monetary crisis began.
During the last peak season, we only had 15 outbound travelers,"
she said. (gis/vin)