Fiscal Fee Likely to Stay Through 2005

(1/24/2005)

Indonesia's Director General of Taxation has said that it now appears unlikely that the promised revocation of the fiscal tax will happen anytime in 2005. The fiscal is a Rp. 1 million (approximately US$108) fee levied on all Indonesian residents traveling abroad

Responding to appeals from ASEAN neighbor who see the charge as an impediment to encouraging travel within the region, the government hinted last year that the charge was on the way to being abolished. However, the Director General of Taxation, Hadi Purnomo, was quoted in the Indonesian-language Bisnis Indonesia as saying any change to the current policy must wait for a formal amendment in the taxation code.

The Government currently collects an estimated Rp. 1.2 trillion (approximately US$130 million) in fiscal charges. The fee, technically an advance payment on income tax, can be offset against payroll tax liabilities by taxpayers.