Indonesia to abolish hefty departure tax

JAKARTA: Indonesia is preparing to abolish the hefty departure tax long decried by the tourism industry, which sees it as a major obstacle to the growth within the region, a report said yesterday. 

The government is drafting a presidential decree to abolish the tax of one million rupiah (RM410) for air travellers going overseas, as well as the 500,000 rupiah (RM205) tax for those travelling by sea and 200,000 rupiah (RM82) tax for those going overland. 

“It is just a matter of time,” State Secretary Bambang Kesowo told reporters for the English-language Jakarta Post daily newspaper. 

Officials acknowledged the loss of revenue from the tax, which applies to most Indonesians and foreign residents of the country, but said it had failed to achieve its intended goal of discouraging Indonesians from travelling overseas. 

The government significantly raised the tax in 1998 in an effort to stop Indonesians from leaving the country and taking their money overseas during the country's brutal economic crisis. 

The tourism industry has been lobbying for the abolition of departure taxes throughout the region. The taxes are seen as countering the effects of the regional boom in new, small airlines that are making travel more affordable.– dpa