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See Indonesia First

State Minister of Culture and Tourism Rejects the Elimination of the Rp.1 million Fiscal Fee for Intra-ASEAN Travellers.

(3/6/2005) As reported in the Indonesian-language Bali Post, State Minister of Culture and Tourism Jero Wacik has flatly rejected any plans to eliminate the Rp.1 million fiscal fee (approximately US$109) in connection with travel within the ASEAN region. Wacik made the pronouncement while speaking at a press conference at the Central Bureau for Statistics (BPS) in Jakarta on Tuesday, March 1, 2005, saying the proposed elimination of the fiscal tax would be "bad for Indonesian tourism."

The Minister's statements appear to be a retreat from Government commitments to waive the Rp.1 million fiscal fee charge Indonesian residents travelling abroad planned in cooperation with other ASEAN governments to support the ASEAN Hip Hop Pass (AHHP) program and building intra-Asean tourism markets. The Hip Hop Program offers an intra-ASEAN tourism packet to travellers via discounts at hotels and flights between ASEAN destinations.

When asked by a reporter of the potential effects on Indonesia's relations with other ASEAN member countries by the sudden decision to renege on promises to eliminate the fiscal fee, Wacik responded firmly, "if they are upset with us, so be it. Our priority is to secure our own country."

The Minister did agree, however, that the fiscal fee should be waived for certain circumstances, such as trips by Indonesian artists to other ASEAN countries, or for other humanitarian or cultural purposes.

Revenue from Domestic Tourism at Risk

According to Wacik, the abolition of the fiscal fee, formerly planned for the beginning of March 2005, would actually impede the development of domestic tourism in Indonesia. He believes that with the elimination of the fiscal fee, domestic tourists with limited financial means would choose to travel abroad instead of within Indonesia itself.

The amount of foreign exchange contributed by overseas visitors to Indonesia, according to the Minister is around US$6 billion per year. Meanwhile, income generated from domestic tourism is estimated to reach Rp.100 trillion (approximately US$10.9 billion).