Foreign Travel Tax Compliance if the Office is in Indonesia – 2024-07-23 21:16:41

Illustration. (While MI)

THE Indonesian tourism sector is starting to recover. According to BPS data in February 2024, there were 1.14 million foreign tourists entering Indonesia in December 2023 and domestic tourists reached 60.3 million. However, unfortunately there are a number of issues that the government must pay attention to.

“Tax levies from foreign OTAs (online travel agents) should be able to be deposited into the state treasury,” said the Director of Digital Economy at the Center of Economic and Law Studies (Celios), Nailul Huda, Friday (19/7). This is inseparable from the growing business model of online travel agents (OTAs) operating in Indonesia. The reason is, the growth of this business model is not balanced with improvements in tax governance because many foreign OTAs are suspected of being tax irregular.

According to Nailul, the government should be able to maximize taxation on foreign OTAs. This can happen if the foreign OTAs operating have a permanent business entity (BUT) in Indonesia. “The VAT collected can also be credited for tax deductions that are deposited into the state treasury,” said Nailul Huda.

Although they have registered as private electronic system organizers (PSE), tax levies are still charged to the hotel because they do not have a BUT. Nailul believes that tax deposits from foreign OTAs must be properly supervised. If not, tax payments are feared to be inappropriate. “What must be supervised is tax deposits with recorded documents must be properly supervised.”

Foreign OTAs are also required to establish representative offices in Indonesia. This, in addition to making it easier for consumers to handle reservation issues, can also make it easier for tax officers to validate tax data. “So it is necessary to adjust such as representative offices in Indonesia so that when data validation is needed, our tax officers are not confused,” he said.

The spotlight on the regulation of foreign OTAs has actually been voiced by the Indonesian Hotel and Restaurant Association (PHRI). So far, what has happened in the field is that hotels are forced to pay the levies to the state. This is certainly a burden in the midst of efforts to restore the tourism industry.

According to PHRI Secretary General Maulana Yusran, the potential tax from foreign OTA transactions could reach Rp3.18 trillion. While the potential loss from the imposition of commission tax reached Rp318.67 billion. (Z-2)