Pricing Ourselves Out of the Market
There are suggestions at parliamentary level that a 75-percent tax be levied on Bali’s entertainment industry, a major sector employing thousands of people and providing leisure for the two million foreigners who holiday annually here, as well as a sizeable chunk of the domestic tourism market.
Such a steep imposition on the pubs, clubs, restaurants and activity venues would be unwise.
Bali’s tourism – the only industry of real value that we have – is depressed because of an absurd central government tax on alcohol of around 300 percent. This makes ordering a bottle of imported wine an expensive affair, and one that leaves many visitors disappointed because they, rightly, will not pay exorbitant prices.
The hotel and villa sector, meanwhile, is facing an astonishing 1,000 percent hike in groundwater rates. This will force some properties to close their doors. Balinese will lose their jobs.
With talk of the new tax, and the existing and pending ones, it is clear that the authorities, whether in Jakarta or here, view foreigners holidaying in Bali as fiscal targets. Taxes are unavoidable, but they’re manageable if sensibly applied. The double- and triple-digit increases Indonesian officials are so fond of are regrettable.
Disgruntled holidaymakers have been saying they will not return to Bali; that instead they will opt for competitors in the region which won’t rip them off, such as Thailand’s Phuket.
If these official charges were in part returned to the island, by way of building up its infrastructure, adding additional personnel in areas such as immigration, or proving transport and related services to the peoples of Bali and its visitors there would be less disquiet. In truth, the money, if not siphoned off, goes to Jakarta and little if any of it comes back. The US$25 visa-on-arrival fee is once such anomaly. It generates around $50 million a year for the central government’s coffers, but Bali sees none of it once it’s collected from foreign tourists.
As the south of Bali becomes ever more clogged with traffic, the only infrastructure planning of note is a see-sawing new highway that alternates weekly between overground, underground and slightly above protected mangroves – the latest proposal and one for which the authorities admit they have not even budgeted for.
No one likes taxes but along with death they are inevitable. They are generally viewed as a mechanism to develop better services for their people, as in various European nations and their free healthcare, unemployment payments and other social-welfare programmes. Nobody likes a swindle, and that is what we have consistently been witnessing in Bali. Another massive tax rise slapped on Bali’s tourism sector would be too hard to bear.Filed under: Editorial