Govt hailed for dumping exit tax

Govt hailed for dumping exit tax

The Jakarta Post, Jakarta

More plaudits were expressed on Thursday regarding the
government's plan to abolish the departure tax imposed on people
wishing to travel overseas, as this would facilitate businesses
in expanding their businesses overseas.

Minister of Industry and Trade Rini Soewandi said the plan
would encourage more businesspeople to travel abroad to promote
trade.

"So far, the departure tax has discouraged businesspeople from
promoting trade abroad," she told reporters during a press
luncheon on Thursday.

Currently, said Rini, only businesspeople traveling on an
official trade mission with government officials were exempt from
the tax.

Aside from such officials, other categories that are exempt
from the tax are diplomats and members of sporting and cultural
missions.

Chris Kanter, the deputy chairman for investment,
transportation, information, telecommunications and tourism at
the Indonesian Chamber of Commerce (Kadin), concurred.

"The scrapping of the tax may not be really significant for
big businesses, but it will make a major difference for those in
small and medium enterprises," he told The Jakarta Post.

Chris added that the departure tax issue was a regular source
of complaint from businesspeople in the tourism sector,
especially those who wished to attend bilateral and regional
meetings.

"The government's plan would certainly help those in the
tourism industry to develop their businesses. Not to mention that
airline tickets to foreign countries are now quite cheap ... even
cheaper than the tax," he said.

The secretary at the Directorate General of Taxation, Djazoeli
Sadhani, said that his office was currently examining both the
positive and negative aspects of the government's plan.

"The revenue we get from departure tax is really huge, and
goes toward helping to develop this country," he told the Post.

Djazoeli said that the gross revenue from the departure tax
stood at almost Rp 1.2 trillion in 2003.

First imposed in 1982, the tax, which is treated as an advance
payment of income tax, is now pegged at Rp 1 million for air
travelers, Rp 500,000 for those traveling overseas by sea, and Rp
200,000 for those traveling overseas by land.

The tax can actually be claimed back, but few people actually
do so. According to Djazoeli, only a small amount of the Rp 1.2
trillion collected last year was reclaimed by taxpayers.