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."