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Fiscal Tax to End January 1, 2009

Registered Tax Payers to Be Exempted from Rp. 1 Million Fiscal Tax Payment for Traveling Abroad.

Bali News:
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The Indonesian Director General of Taxation has announced its intention to exempt Indonesian residents who possess an official tax number (NPWP) from paying the unpopular Rp. 1 million (US$107) fiscal charge each time they depart on a foreign trip, effective January 1, 2009.

The fiscal charge, which is settled at special tax kiosks at Indonesian airports and seaports, is technically reimbursable and can be credited against final payroll tax liabilities.

The new move designed to enhance bureaucratic efficiency and encourage Indonesian's to register and pay taxes, will only be available to the estimated 4.9 million individuals who have registered and obtained an official NPWP registration from their local tax office.

Tax officials are hinting that the "fiscal free" facility may only be a temporary measure, with the entire policy up for review on January 1, 2011, two years after the introduction of the trial "fiscal free" period.

Government officials have been quoted in the national press as saying they are confident that any loss in revenues from the fiscal fees will be more than offset by increases in the national taxpayers' base. In 2007, the government collected Rp. 2.5 trillion (US$268.8 million) in fiscal fees. The total fiscal payments collected in 2006 totaled Rp.1.2 trillion (US$129 million).

Under the new facility to take effect on January 1, 2009, travelers need only show the NPWP of the family head to be exempted from paying the fiscal charge. Dependents under the age of 21 can also be exempted under their parent's NPWP, while children under the age of 12 are not required to pay the fiscal fee.

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