Tourism board slow to receive tax revenues

JAKARTA (JP): The Indonesian Tourism Promotion Board, a semi- governmental body assigned to promote the country's tourism industry abroad, has only received Rp 31.12 billion, or 26 percent of the Rp 120.17 billion expected in development taxes.

The managing director of the board, Wuryastuti Sunario, said at a two-day discussion on tourism yesterday that the Rp 31.12 billion (US$13.28 million) was received in 1994/1995 and 1995/1996 after a decree was issued in 1993 allowing the use of a portion of development taxes for tourism industry promotion.

Based on Presidential Decree No. 6/1993, the government requires the 10 provinces most frequented by tourists -- North and West Sumatra, Jakarta, West, Central and East Java, Yogyakarta, Bali, North and South Sulawesi -- to pass on one- fifth of their revenues from the 10-percent development tax to the Ministry of Tourism, Post and Telecommunications. The collected funds will then be channeled to the Indonesian Tourism Promotion Board for promotion activities. The remaining 80 percent will go to local administrations.

Tuti told the meeting, which ended yesterday, that her board has never received the funds expected from the taxes.

According to Tuti, of the Rp 120.17 billion ($51.3 million) originally expected from taxes in the 1994/1995 and 1995/1996 periods, the Jakarta administration should have contributed 52 percent, Bali 20 percent, West Java 8.1 percent, East Java 7.2 percent, Central Java 6.3 percent, North Sumatra 3 percent, Yogyakarta 1.7 percent, South Sumatra 0.8 percent, West Sumatra 0.7 percent and North Sulawesi 0.6 percent.

However, South Sumatra has paid only 86 percent of its expected payments, East Java 69 percent, Yogyakarta 51 percent, West Sumatra 50 percent, North Sulawesi 49 percent, North Sumatra 44 percent, West Java 39 percent, Central Java 30 percent, Jakarta 22 percent and Bali 6 percent, she said.

Indonesia, through the tourism promotion board, needs tens of millions of dollars for the promotion of its tourism industry, she said.

The number of tourist arrivals in Indonesia reached 4.3 million last year, bringing in some $5.2 billion in foreign exchange. The number of visitors is estimated to increase to more than six million by 1998 and to 11 billion by 2005.

The Indonesian Hotel and Restaurant Association has reported several times that the main problem with the channeling of funds is at the local administration level, which receives tax payments from the association's members.

The Indonesian Tourism Promotion Board, which was set up in 1991 as an independent body, spent more than $20 million last year on promotional activities and overseas advertisements in print and electronic media.

Tuti said that the board used bridging loans from private firms to cover its operating costs in 1995/1996.

"Currently, 89 percent of the board's funds come from the government and 11 percent from private firms. By 2005, when competition in the global market will be fiercer, we expect the funding to come equally from the government and private firms," she said.

The discussion, held by the Indonesian Hotel and Restaurant Association, focused on tourism in the Seventh Five-Year Development Plan (Repelita VII) period. (icn)