Tourism investments may get tax holiday after all

Tourism investments may get tax holiday after all

JAKARTA (JP): The government is considering extending a system
of tax-incentives designed to attract new investment to include
projects related to tourism, an official from the Ministry of
Tourism, Arts and Culture said on Tuesday.

Director General of Tourism I Gde Ardhika said the ministry
viewed income tax relief as a crucial way to encourage new
investment in the beleaguered tourist industry.

"We will provide tax holidays for new investments in large
hotels and resorts in areas outside Java and Bali," Ardhika told
reporters on the sidelines of a seminar on tourism here.

He said the ministry had proposed the tax incentive scheme to
the State Minister of Investment, Hamzah Haz, and was planning to
discuss the matter further in the near future, he said.

Last week, the Investment Coordinating Board, which is also
chaired by Hamzah, announced that investments in 22 "pioneering
industries" would be entitled to tax holidays. Tourism was not on
the list.

The tax holiday facility is based on a decree signed by
President B.J. Habibie last month.

Ardhika said the proposal for tax incentives followed up on
the recommendations made by a meeting of tourism officials from
the Association of Southeast Asian Nations (ASEAN) in Singapore
last week.

Delegates at the meeting of the ASEAN Tourism Association
(ASEANTA) urged member countries to allow full foreign ownership
of businesses related to tourism and to expedite the licensing of
ventures in the sector.

Ardhika said the tourism ministry planned to ask the National
Land Agency to permit foreign investors to obtain land-use
concessions for projects related to tourism.

"We are also studying whether there needs to be a limitation
on the area of land used for resorts and hotels, for example," he
said.

During the ASEAN Tourism Forum which ended on Sunday, ASEANTA
members also agreed to introduce a special air pass entitling
passengers to buy coupons priced at US$90 for travel to any
single destination in the ASEAN area.

Key participants in the air pass scheme are Garuda Indonesia,
Singapore Airlines, Malaysia Airlines, Thai Airways, Philippine
Airlines and Royal Brunei. (das)