Medan issues new travel policy

Apriadi Gunawan, Medan

The North Sumatra provincial administration announced on Friday that Indonesian nationals traveling to Malaysia through seaports and airports in Medan would not be required to pay a fiscal tax.

Speaking on behalf of the North Sumatra governor, a senior tax official said the fiscal-free departure would apply to Polonia Airport, and the Belawan and Tanjung Balai ports.

Bambang Heru Ismiarso, the head of North Sumatra's Directorate General of Taxation, said the new policy was introduced following a request by the Malaysian government to the North Sumatra governor.

The request was made through a letter dated June 6 this year, signed by Mohd Yusoff bin A. Bakar, Malaysia's consul general in Medan, the capital of North Sumatra province.

Fiscal-free travel would be aimed at boosting trade and tourism between the two countries, according to Yusoff in the letter.

"The new facility is taking effect today (Friday) at the request of the Malaysian government," Bambang said.

He said Director General of Taxation Hadi Purnomo had earlier imposed a fiscal-free policy for flights between Padang, the capital of West Sumatra, and Kuala Lumpur.

In addition to West Sumatra and North Sumatra, there are other five other provinces in Indonesia where a similar policy is in place: Aceh, Riau, Bengkulu, Jambi and South Sumatra.

Bambang said the tax office would lose revenue as a result of the new policy. According to data from Polonia Airport, the government collects Rp 3 billion (US$315,789) in revenue each month from fiscal payments at the airport.

The old fiscal policy required each person traveling to Malaysia through Polonia Airport to pay Rp 1,000,000 in fiscal, while those traveling to Malaysia through Belawan or Tanjung Balai ports were required to pay Rp 250,000.

The North Sumatra Tourism Board hailed the new policy, saying it would provide a boost to airlines and tourism-related businesses in North Sumatra.

Antara reported that flights on Malaysian Air System (MAS), the only airline offering direct flights between Medan and Kuala Lumpur, were nearly fully booked on Friday, the first day of the new policy.

A marketing officer at Polonia Airport said 80 percent of MAS tickets from Medan to Kuala Lumpur on Friday had been sold. MAS serves the Medan-Kuala Lumpur route twice a day, at 1 p.m. and 3 p.m., with return tickets costing $138.