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Government Back Tracks on Fiscal Tax Pledge

Minister Wacik Says Fiscal Tax Here to Stay for at Least Next 10 Years.

(4/18/2005) In an apparent about-face on the government's pledge to fall in line with inter-ASEAN initiatives and eliminate the Rp. 1 million (approximately US$ 107) fiscal tax charged to Indonesian nationals and residents every time they travel abroad, Minister of Culture and Tourism Jero Wacik has announced that it will be at least 10 years before Indonesia will be able to eliminate the tax.

Acknowledging that Indonesia's ASEAN partners are eager that the tax be eliminated in order to facilitate inter-regional travel, the Minister said the tax must remain in place in Indonesia out of fear of the "trillions" of Rupiahs that would be lost in foreign exchange if Indonesians suddenly started traveling abroad.

In comments made at the opening of the Surabaya Orchid Show 2005, the Minister said his office wished to discourage foreign travel by Indonesians in favor of domestic holidays.

Confident that Indonesia's neighbor will not take retaliatory steps to dissuade the nationals from visiting Indonesia, the Minister said that his office now has a budget of US$18 million to promote inbound tourism into Indonesia with the Middle East, India, China and Australia among the main source markets being targeted for visitors to Indonesia.