ASITA URGES INTRODUCTION OF TAX REFUND SYSTEM FOR TOURISTS

Jakarta, Jan 17 (ANTARA) - The Association of Indonesian Tour and Travel Agencies (ASITA) has called on the government to immediately implement a tax refund scheme for foreign tourists to stimulate their spendings in the country.

"To boost foreign tourist spendings we must apply a Value Added Tax (VAT) refund systen for international tourists who shop in Indonesia," Jongki Adiyasa, vice chairman of ASITA's Jakarta chapter, said here on Saturday.

The government is planning to implement a Value Added Tax (VAT) refund scheme for foreign tourists for the first time in April 2010, and two of Indonesia's international airports, namely Jakarta's Soekarno-Hatta and Bali's Ngurah Rai, will be the location of the system's pilot projects.

Later, the system would also be set up in all international airports in Indonesia.

The VAT refund facility would only be available to foreign passport holders who have spent money buying things in Indonesia. When they leave the country again, all the money they have paid for VAT in buying things in the country will be returned to them.

The system has already been applied for a long time in such countries as Japan, Singapore, China, Australia, and Malaysia, Yongki said.

"If we consistently apply the system, it will stimulate foreign tourists to come to and shop in Indonesia," he said.

Through the consistent application of the VAT refund system, the tourism sector could then significantly increase its contribution to the country's GDP (gross domestic product), according to Yonkie.

He said ASITA was also requesting that travel agencies be given full freedom to become a player in the inbound or domestic tourism segment.

Moreover, by working on the inbound pillar, the potential to boost the number of incoming tourists and increase their spending in Indonesia would also grow.

"The government should also be willing to give tax holidays to inbound travel agencies," he said.

In 2010, Indonesia hopes to attract some 7 million foreign tourists with the amount of their spendings in the country projected at 6.75 billion dollars. The number of domestic tourist trips is projected at 230 million trips and their spendings at Rp138 trillion.

Last year, Indonesia was visited by 6.459 million foreign tourists, an increase of 0.4 percent compared to 2008. Domestic tourists made 226 million trips, up from 225.4 million trips in 2008.