A tax won’t fix tourism

The paper says a tax would do little to change the behaviour of tourists or to keep out rowdy ones.


Bali Governor I Wayan Koster (second right) speaks at a press conference on May 6, 2022 to announce the deportation of Russian couple Amdrei (left) and Alina Fazleeva (second left) for taking photos in the nude at a Hindu temple compound in the island province. (Bali Provincial Administration /File)

April 18, 2023

JAKARTA – It did not take long for potential solutions to emerge after reports about foreign tourists misbehaving in Bali spread far and wide.

One idea that has made both domestic and foreign headlines is a proposal from Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan to impose a tax specifically on foreign tourists.

It is entirely unclear how this might fix the issue, because if the threat of arrest or deportation doesn’t stop foreign nationals from posing half-naked at sacred sites, riding motorcycles without a helmet or displaying rowdy and drunken behavior in public, then neither will paying a tax beforehand.

Ugly incidents involving foreign nationals, both tourists and residents, have happened many times in the past, their behavior ranging from disrespectful to outright unlawful. There seems to have been a spate of cases in recent weeks, though perhaps that could simply be a misperception caused by wide exposure in the social media era.

However, perception outweighs statistics when it comes to branding and as such, this negative image could damage Bali’s reputation as a global tourism magnet. It is therefore understandable that public officials feel obliged to respond to the series of events, even at the risk of shooting from the hip.

To be clear, the way some individuals trample on cultural norms, laws and regulations or local beliefs while on holiday, whether in Bali or elsewhere, is a disgrace; no two ways about it. However, if such incidents are cited as the reason for imposing a tax on all foreign tourists across the board or even tourists from specific countries, such a policy smacks of collective punishment.

Most tourists will have no problem with paying such a tax, but framing the policy as a response to the bad behavior of a few will give the impression that Indonesia has had enough of all foreigners visiting its shores. And this will taint Indonesia’s well-deserved and hard-earned image as an easy-going, hospitable and welcoming country.

According to Statistics Indonesia, 5.47 million tourists visited the country in 2022, an increase of 250 percent compared to 2021.

The government should not discourage foreign tourists from visiting, given that they bring in foreign exchange and tend to spend considerably more than domestic tourists. These are the tourists we need as the industry continues to recover from the massive blow it suffered from the coronavirus pandemic.

Given that consumers are having to tighten their belts in other countries and that many struggle to afford costly airfares, the government may want to consider the exact opposite of a tourist tax: a temporary subsidy to support the sector’s recovery.

As for the mischief caused by a small minority of foreigners, nothing is preventing the government from issuing new laws that protect sacred sites, tightening enforcement and deporting offenders.

A tax would do little to change the behavior of tourists or to keep out rowdy ones. The proposal therefore looks more like a knee-jerk reaction to the uproar over the viral incidents.

It must be tempting to jump on that populist bandwagon as election season nears, but the government must keep its focus on the tourist industry, which has expressed concern over the potential tax. It is the hotels, restaurants and many small businesses in Bali that will pay the price, and not the social media hotheads across the country, if such a tax is imposed and leads to a fall in the number of tourists.

Meanwhile, it seems the Tourism and Creative Economy Ministry refuses to be rushed into a decision on the matter. “We expect the study [on the proposed tax] to wrap up in the coming weeks so we can discuss and make a decision,” tourism minister Sandiaga Uno told reporters last week, apparently keen to provide a cooling-off period from the social media frenzy.

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