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'Fiskal' Tax to Be Eliminated on January 1, 2011

Government to Close 'Fiskal' Tax Collection Office and End Need to Show Tax Registration Cards for Indonesian Residents Traveling Abroad.

(10/25/2010) Tempo Interaktif reveals that the Indonesian government will soon introduce a policy where the "fiskal" or prepayment of income tax at airports will be eliminated. This will represent the next step in the liberalization of the "fiskal" tax policy that began with the recent elimination of the Rp. 2.5 million (US$277) payment for Indonesian residents who could prove registration in the national income tax program.

Beginning in 2011, travelers will no longer be required to show their tax registration (NPWP) in order to be exempted from making the prepayment on income tax.

"The exemption from the 'fiskal' applies for everyone at every airport," said Iqbali Alamsyah from the public affairs section of the Directorate General of Taxation.

Formerly all Indonesian residents were obliged to pay Rp. 1 million (US$111) each time they departed by plane from Indonesia. On January 1, 2009, this requirement was changed, abolishing the payment for anyone able to present a tax registration card while increasing the payment to Rp. 2.5 million (US$277) for those not registered as taxpayers.

On January 1, 2011, the rules will once again change, removing the payment of the "fiskal" for all Indonesian travelers and ending as well any requirement to prove taxpayer registration.

Igbali revealed that while the tax office expects to collect Rp. 39.57 billion (US$4.4 million) in "fiskal" payments in 2010, tax officials are confident that overall tax revenues will increase as efforts continue to enroll the active participation of all segments of society as active taxpayers.