Tourism cheers plan to abolish departure tax

Tourism cheers plan to abolish departure tax

The Jakarta Post, Jakarta

The tourist sector, hit by recent internal and external shocks,
would benefit in the long-term should the government's plans to
abolish the fiskal departure tax materialize, industry players
say.

Indonesian Hotel and Restaurant Association head Yanti
Sukamdani and Meity Robot of the Indonesian Tourism Community
group brushed aside on Sunday fears the abolishment of the tax
would only benefit Indonesia's competitors in the region.

"In the medium and long term, the move would lure more flights
and airlines into the country -- which means the (airlines) will
bring in more foreigners as they will certainly not want to come
here with empty seats," Yanti, who also heads the ASEAN Hotel and
Restaurant Association, said on Sunday.

"Tourism works two ways. Tourism and travel agencies in ASEAN
nations will take advantage of (the increased traffic) by
offering more packages to Indonesians," Meity, who is a former
chairwoman of Indonesia's Tour and Travel Association, said.

"But at the same time these agencies, most of whom have signed
accords with local tourism companies and travel agencies here,
will promote this country as well," Meity said.

Yanti and Meity said the tourist industry had long asked for
the abolition of the departure tax. The existance of the tax has
been the main complaint of members of the ASEAN tourism
community, who said it discouraged Indonesians from traveling
abroad, they said.

"We've heard complaints from airlines too, who said that with
the such a costly departure tax, they would think twice before
expanding their operations into the Indonesian market," Meity
said. She and Yanti regularly represent Indonesia at ASEAN
meetings on tourism.

They are optimistic the new policy will help accelerate the
recovery of Indonesia's tourist industry, which has weathered a
series of shocks in the recent years. The Bali bombings, JW
Marriott hotel blast, the outbreak of SARS and bird flu
devastated tourism in the country during the past two years.

Earlier, the Indonesian Chamber of Commerce lauded the plan,
saying it would boost the ability of the country's businessmen --
notably small and medium-sized ones -- to promote their products
abroad.

The government is drawing up a presidential decree to scrap
the departure tax imposed on Indonesians and foreign residents
wishing to leave the country, although Minister of Finance
Boediono has said the abolition would likely be gradual and first
implemented on trips to ASEAN countries.

First introduced in 1994, the departure tax for air travellers
was raised by 330 percent in late the 1990s, from Rp 250,000 to
Rp 1 million. The government also raised the departure tax by 150
percent from Rp 200,000 to Rp 500,000 for those traveling
overseas by sea and by 300 percent from Rp 50,000 to Rp 200,000
for those traveling overseas by land.

There are several exemptions, such as to members of the
diplomatic corps, government officials traveling on official
business, and members of sporting and cultural missions.

Elsewhere, Indonesian Retailers Association chairman Handaka
Santosa also said the abolition would be welcome as it would
encourage businessmen to travel abroad more to promote their
businesses.

However, it could also mean Indonesians traveled abroad to
shop in neighboring countries, notably those with special tax
benefits.

"Singapore, for example, has a VAT-refund facility enabling
tourists to reclaim funds at the airport before their journey
home," he said.

"Indonesia should offer similar benefits to lure more
tourists."