RI May Reap Rp 6 Trillion If Sales Tax on Luxury Goods for Cruise Ship Abolished

Jakarta – Coordinating Minister for Home Affairs Luhut Binsar Pandjaitan held a coordination meeting discussing Sales Tax on Luxury Goods (PPnBM) for cruise ship and foreign yachts. As a result the government will abolish the tax specifically for foreign tourism ships.

Luhut explained that Indonesia earned about Rp 3 billion in taxes from the entry of foreign tourism vessels, however, the government’s calculation of potential state revenues if the tax is eliminated will reach to nearly Rp 6 trillion.

“With that (the estimation of potential revenue), the multiple effect derived from the yacht rent by the person, port’s fee side, etc. This calculation was made by the Minister of Tourism,” he said at Kemenko Maritim, Jakarta, Monday (23/7/2018).

Although the Government will abolish the tax, they will issue standardization of special entrance rates for certain tourist destinations that will be established as an elite tourism area. Foreign tourists to enter the elite tourism area will be charged a high rate.

“So for example Raja Ampat, projected to become high end tourists (elite tourism area), people (foreign tourists) will have to pay for example US $ 250 to enter. If not (the environment) will not sustain,” explained Luhut.

To set the tariff, the government will reflect on other countries such as Singapore, Thailand and other Asian countries (which implemented similar tax).

“There are several areas, we must be courageously (implemented the tax), if we (wish) to get Rp 6 trillion instead of Rp 3 billion,” said Luhut.

By abolishing PPnBM on yacht, the government predicts there will be 250 boats both cruise ship and yachts that enter Indonesia. It is hoped to help boost Indonesia’s foreign exchange.

“Now what makes people come to Indonesia easily bring money, since 1 million tourists is equal to US $ 1 million,” said Luhut.

While in the same place, the Director General of Customs and Excise Heru Pambudi said the government also plans to increase the number of entrances for cruise ships from 20 points to 93 points, while for the yacht will still be the same at 20 points.

“For the yacht if the need requires additional entry points, we are ready,” he said.

In this case the Directorate General of Customs and Excise itself serves as a supervisor while serving the ships of foreign tourists who enter. It also has prepared an online application for registration of foreign tourist ships entering.

All the points that become the entrance and exit of foreign ships are connected with the Directorate General of Customs office. The system is believed to facilitate the foreign tourism ships entering Indonesia.

“Mosal entered in Aceh and exited in Papua, it’s online. They can move freely wherever and we will still be able to monitor. Administratively it’s easy and online,” he added.

Informatively, PPnBM cruise ships and yachts are regulated in the Regulation of the Minister of Finance (PMK) No. 35/PMK.010/2017, regarding the type of taxable luxury goods in addition to motor vehicles subject to sales tax on luxury goods.

In this regulation the yachts, excursion boats, and water vehicles including yachts are subject to PPnBM of 75%.


Source: https://finance.detik.com/berita-ekonomi-bisnis/d-4129504/ri-bakal-raup-rp-6-t-jika-kapal-pesiar-cs-bebas-ppnbm

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