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)