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THE Indonesia’s government will exempt the hotel and restaurant tax for six months as a stimulus from the impact of the spread of the corona virus or Covid 19 on tourism.
According Minister of Finance Sri Mulyani Indrawati said, the hotel and restaurant tax exemption will take effect on April 1, 2020. A letter of the Minister of Finance’s Regulation (PMK) has been made for its implementation.
“The policy will be implemented in 10 tourist destinations and 33 regencies/cities. As compensation, the central government will channel IDR3.3 trillion in funds to local governments. This is in lieu of the exemption from the tax collection so that the regional government does not suffer losses,” Sri Mulyani said.
She added, data from the Indonesian Hotels and Restaurants Association (PHRI) said the impact of the spread of the corona virus was felt by hotel, restaurant and airline entrepreneurs who had massive share and investment value. This dynamic is said to be force majeure or an unavoidable condition.
“The drop in hotel occupancy by 40% has a significant impact on the continuity of the hotel business. Because the hotel has a large number of employees and property. Some hotels in Batam and Bali ask their employees to take time off when the demand is quiet,” Sri Mulyani added.
Sri Mulyani explained that on an annual basis (year on year / yoy) the decline in average hotel occupancy at the beginning of the year was not as large as this year’s period. During low season, the PHRI recorded an average decrease in occupancy of only about 10%.
According to her, the decline in hotel occupancy was felt in tourism service industries outside Java such as Sulawesi, Kalimantan and Sumatra. The area is estimated to decrease occupancy by up to 40%. While the tourism industry in Jakarta and Bogor is likely to decline not large because it does not need airlines as a mode of transportation. [sources/special photo]
