Taxation official defends hike in departure tax

Taxation official defends hike in departure tax

JAKARTA (JP): The fourfold increase in departure tax for
residents leaving the country by air is aimed at swelling the
government's coffers, the director general for taxation said.

Fuad Bawazier told Antara Tuesday that the increase, from Rp
250,000 (US$26) to Rp 1 million starting today, was long overdue
because the tax had not been raised for 10 years.

Fuad said the government received Rp 400 billion from the
departure tax in the 1996/1997 fiscal year.

He said the hike would not necessarily mean a fourfold
increase in government income as the number of residents going
abroad had declined with the economic recession.

Fuad rejected accusations that the exit tax would pose a heavy
burden on people intending to leave the country.

"There are now many wealthy Indonesians with huge earnings.
You can see that from the number of people leaving the country,
including the number of people going on the haj pilgrimage.

"There are even Indonesian students who shuttle abroad and
back every week," he was quoted by Antara as saying.

"We can't understand it if anyone objects to the increase in
the exit tax," he said, underscoring the fact that people working
and studying abroad and those seeking medication overseas were
exempt from the tax.

People on official government missions and members of sports
and cultural missions also do not have to pay.

Under a 1996 rule, residents in provinces which have special
regional economic cooperation arrangements with neighboring
countries are also exempted for travels within the range.

The exemptions applied to the Indonesia-Malaysia-Thailand
growth triangle (which involves Aceh, North Sumatra, West Sumatra
and Riau in the Indonesian side), the Indonesia-Malaysia-
Singapore growth triangle (involving Riau, West Sumatra, South
Sumatra, Lampung, Jambi, Bengkulu and West Kalimantan) and the
Brunei-Indonesia-Malaysia-Philippine regional cooperation
(involving North Sulawesi, Central Sulawesi, South Sulawesi,
Southeast Sulawesi, Southeast Sulawesi, West Kalimantan, East
Kalimantan, South Kalimantan, Central Kalimantan, Maluku and
Irian Jaya).

Acting chief of Banda Aceh tax office, Zulfachri Hamid, told
Antara yesterday that the exemption still applies in spite of the
exit tax increase.

The exit tax for those leaving the country by sea is being
increased to Rp 500,000 from 200,000, and those by land to Rp
200,000 from Rp 50,000. The payments can be set against one's
income tax bill.

Fuad said the exit tax was also seen as an effective tool to
discipline people into paying their income tax.

The exit tax was introduced in the early 1980s as part a
measure to discourage people from traveling abroad.

Pressure to abolish the tax has come not only from
Indonesians, but also from neighboring governments grouped in the
Association of Southeast Asian Nations (ASEAN).

The matter had been raised at various ASEAN meetings, with the
neighboring governments arguing that the tax hampered the
development of contacts and exchanges not only between tourists
in the region but also between businesspeople.

Travel agents have said that even without the tax hike, the
number of Indonesians traveling abroad had fallen sharply because
of the depreciation of the rupiah in the past seven months. (emb)