JAKARTA, Feb. 25 (Xinhua) -- Indonesia on Tuesday announced a stimulus package for the tourism sector with an aim to avoid further contraction.
The package comprises tax exemptions for hotels and restaurants in 10 tourism destinations, and discounted airline tickets for travelers, Indonesian Finance Minister Sri Mulyani Indrawati said.
The tax abolition is expected to take effect for six months, starting from March, the minister said.
To offset potential losses, the government would compensate provincial administrations where the hotels and restaurants are located, with funds totaling 3.3 trillion rupiahs (some 237.5 million U.S. dollars), the minister said, citing that the taxes stood at 10 percent.
On the airline tickets, the minister said the ticket prices for domestic travelers are deducted by 30 percent, and the government provides a compensation of 443.9 billion rupiahs (about 31.95 million U.S. dollars) for the ticket price discount.
On the foreign travelers, the ticket prices would be reduced by the airlines, she said without elaborating further.
For that, the government allocates compensation funds of 298.5 billion rupiahs (21.49 million U.S. dollars) to the airlines and travel agents, Indrawati noted, adding that the funds would also be used for promotion to lure more foreign holiday makers.
Meanwhile, Indonesian Minister for Tourism and Creative Economy Wishnutama Kusubandio said the recent economic condition would likely make the country's aviation industry suffer a financial loss of 4 million U.S. dollars.
Southeast Asia's biggest economy grew 4.97 percent in the final quarter of last year from 5.18 percent in the same period of the presiding year, according to data from the national statistics bureau.
Indonesian President Joko Widodo said that the country's competitiveness in the tourism sector has improved in recent years, but it is still below those of the neighboring ASEAN member countries.
This year, the government sets a target of 17.3 million foreign tourist arrivals with higher revenues of 21 billion U.S. dollars, expecting travelers to stay longer, according to the Tourism Ministry.
