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Fiscal Fee: A Case of Maybe and Maybe Not

Comments on Future of Fiscal Tax from Bali Chamber of Commerce Contradict Recent Statements from Tax Office.

(1/31/2005) Statements made by the Chairman of the Bali Chamber of Commerce (KADIN), Gede Wiratha on Friday, January 28, 2005 suggesting the fiscal change will be abolished in March seem to contradict statements recently made by the Director General of Taxation and reported on balidiscovery.com [Fiscal Fee Likely to Stay Through 2005]

Quoted in the Indonesian-language Bali Post, KADIN-Bali Chairman, Gede Wiratha said that following meetings with the Coordinating Minister for the Economy, Aburizal Bakrie, in Jakarta he had learned that the fiscal fee charge all Indonesian residents wishing to travel abroad would be abolished in March 2005.

Indonesian residents traveling overseas are required to pay a Rp. 1 million (approximately US$108) fiscal tax at airports before boarding international flights. This payment is an advance installment on payroll taxes and can be deducted against future income tax payments.

Maybe and Maybe Not

The comments of the Chairman of the Bali Chamber of Commerce are in contradiction to recent statements by the Director General of Taxation, Hadi Purnomo, who said necessary changes in the tax code made the abolishment of the fiscal charge unlikely anytime in 2005.

Wiratha, in foretelling the change in fiscal policy, said travel abroad should be open to all citizens and any loss in tax revenues would be more than offset by the broader horizons enjoyed by Indonesians suddenly able to travel internationally.

Indonesia as a member of the 10 member Association of Southeast Asian Nations (ASEAN), has come under increasing pressure to abolish the tax in order to stimulate inter-regional travel among ASEAN states.