Indonesia ups exit taxes from Thursday

INDONESIANS and foreigners residing in the country will, from Thursday, have to pay a higher exit tax of one million rupiah (S$224) when leaving the country by air, the Finance Ministry announced yesterday.

This is up from the current exit tax – or “fiskal” as it is referred to here – of 250,000 rupiah. The tax, paid on departure by all who reside in the country, is in addition to the airport departure tax of 25,000 rupiah.

Increases were also announced for those leaving by sea, and a tax has now been imposed for those leaving by land – primarily across the land border in Indonesia’s Kalimantan provinces to Brunei and the East Malaysian states of Sabah and Sarawak, and in Irian Jaya to neighbouring Papua New Guinea.

According to the ministry statement, those leaving by sea must pay an exit tax of 500,000 rupiah – up from 100,000 rupiah now. Those going by land must pay 200,000 rupiah from Thursday.

The statement did not indicate any reasons for the tax hike, but some observers here believe the move was aimed at correcting a shortfall in state revenue caused by the current economic crisis.

“The government has to find some ways of increasing revenue because of increased unemployment and a fall in corporate revenue,” a Jakarta-based analyst said.

Others speculated that another aim could be to try and discourage residents from unnecessary travel or from bringing out foreign currency in a country where the rupiah has lost some 80 per cent of its value against the US dollar.

Given the timing of the announcement late yesterday evening, it was still too early to ascertain the impact of the tax hike. But some observers said it could have a significant impact on travel to neighbouring countries, including Singapore.

Mr David Chang, research head of Trimegah Securities, said many expatriates here who use Jakarta as a base to travel with in the region would also be affected. “It will push up the cost of doing business here,” he said.

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