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Little Response to Indonesian Tax Refund Scheme

Poor Socialization and Limited Retail Access Blamed for Minuscule Response to Shopping Tax Rebate for Indonesian Visitors.

(7/24/2010) The public's response to the government tax refund scheme for tourists shopping in Indonesia launched on April 1, 2010, has proven to be unspectacular.

Bisnis Bali reports that nation-wide through June 28, 2010 only 156 tax refund applications have been filed with a total refund value of Rp. 128 million (US$13,900).

Suryo Utomo, the Director of Tax Regulation I for the Department of Finance, said: "We are still evaluating the policy introduced last April; the positive results of this program have been minimal."

Putting the best face on the poor response, Suryo said the refunds paid to date "mean tourists have begun to understand that we have this policy."

The majority of tax refunds have been filed at the Ngurah Rai International Airport in Bali where a total of 124 refund applications have been made. Meanwhile, in the nation's capital of Jakarta, only 32 refund applications were made during the nearly first three months of the rebate program.

As a possible remedy to the lackluster reception to the tax incentive program the government is said to be considering adding the number of retail shops and airports offering the tax rebate. Among the additional airports that may be added to the scheme is Yogyakarta.

In all, there are only 8 retail outlets extending the 10% VAT refund, including Metro and Sarinah.

Tourist visitors wishing to earn the tax refund must shop at a designated retail outlet and spend a minimum of Rp. 5 million (US$543). Official tax receipts for purchase together with the items purchased must be presented at the airport refund office upon departure

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