Indonesia announces stimulus on tourism to avoid further contraction


Indonesia on Tuesday (Feb 25) announced a stimulus package for the tourism sector with an aim to avoid further contraction. The package comprises tax exemptions for hotels and restaurants in 10 tourism destinations, and discounted airline tickets for travellers, Indonesian Finance Minister Sri Mulyani Indrawati said. - Bloomberg

JAKARTA: Indonesia on Tuesday (Feb 25) announced a stimulus package for the tourism sector with an aim to avoid further contraction.

The package comprises tax exemptions for hotels and restaurants in 10 tourism destinations, and discounted airline tickets for travellers, Indonesian Finance Minister Sri Mulyani Indrawati said.

The tax abolition is expected to take effect for six months, starting from March, the minister said.

To offset potential losses, the government would compensate provincial administrations where the hotels and restaurants are located, with funds totaling 3.3 trillion rupiahs (some 237.5 million U.S. dollars), the minister said, citing that the taxes stood at 10%..

On the airline tickets, the minister said the ticket prices for domestic travellers are deducted by 30%, and the government provides a compensation of 443.9 billion rupiahs (about US$31.95mil) for the ticket price discount.

On the foreign travellers, the ticket prices would be reduced by the airlines, she said without elaborating further.

For that, the government allocates compensation funds of 298.5 billion rupiahs (US$21.49mil) to the airlines and travel agents, Indrawati noted, adding that the funds would also be used for promotion to lure more foreign holiday makers.

Meanwhile, Indonesian Minister for Tourism and Creative Economy Wishnutama Kusubandio said the recent economic condition would likely make the country's aviation industry suffer a financial loss of US$4mil.

South-East Asia's biggest economy grew 4.97% in the final quarter of last year from 5.18% in the same period of the presiding year, according to data from the national statistics bureau.

Indonesian President Joko Widodo said that the country's competitiveness in the tourism sector has improved in recent years, but it is still below those of the neighbouring Asean member countries.

This year, the government sets a target of 17.3 million foreign tourist arrivals with higher revenues of US$21bil, expecting travellers to stay longer, according to the Tourism Ministry. - Xinhua/Asian News Network
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