Sailing group claims tax rules 'sabotage' annual yacht rally

Alit Kertaraharja ,  Contributor ,  Buleleng   |  Thu, 09/18/2008 10:35 AM  |  Bali

The Indonesian Love Marine Foundation (YCBI) on Tuesday lambasted the government's temporary import/export tax regulation on international yachts.

The foundation threatened to cancel future Sail Indonesia events if it did not review the regulation.

YCBI chief Raymond T. Lesmana accused the government of selectively sabotaging 2008 Sail Indonesia by implementing the tax regulation on the event.

The same regulation, he said, was not imposed on other organizations holding similar events, including the Ambon race and Darwin-Samulaki race. They were exempted from paying taxes.

"There must be a clearer regulation. Private yachts must also be charged. Why is the tax office only targeting Sail Indonesia?" he said during a press conference in Singaraja.

"This event is a reflection of our country to the international world. Yet, they decide to sabotage it," he said.

Sail Indonesia is an annual yacht rally, with this year's event being coordinated by David Woodhouse of the Darwin Yacht Club and YCBI.

About 150 yachts from 15 countries sailed from Darwin, Australia, on July 26, 2008 and are expected to reach the finish line on Batam Island sometime late October.

The rally experienced a stint during a stop at Kupang in East Nusa Tenggara, after customs officials barred several yachts from continuing the race for failing to comply with the regulation.

The regulation, which was passed in 2004 and implemented last year, stipulates that all items carried by foreign visitors must be levied for temporary import/export duties.

They constitute 5 percent of the entry fee and 47.5 percent of the carried assets (10 percent in tax, 30 percent in luxury tax, and 7.5 percent in added-value tax) as collateral.

The Kupang incident caused significant delay to the race. Of the 121 participating yachts, only 22 reportedly managed to enter the waters of Lovina, north off the coast in Buleleng regency, as of Tuesday.

"Aside from other factors including weather, geography, lack of human resources and assistance in marine navigation system, the biggest problem was the unclear duty regulation," Raymond said.

He said he understood the duty was applied to keep the items from being misused. Yet, he added, its application to the yacht race is "nonsensical".

"In effect, if the race involves 100 yachts with a total asset value of Rp 500 billion (US$54.3 million), the committee will have to provide a collateral of Rp 270 billion. How are we supposed to have that kind of cash?" Raymond said.

He demanded a guarantee from the director general for marine and fisheries resources supervision (P2SDKP) that the race would go on without further delay.

Puja Erawan, head of the Tourism Agency in Buleleng who attended the press conference, said the annual Sail Indonesia event contributes significantly to tourism in the area.

A single person involved in the rally, he said, could spend at least $50 a day, which "is not for our profit, but are enjoyed by the restaurants and local residents they visit".

In August, following the Kupang incident, the Culture and Tourism Ministry threatened to take punitive actions against the 2008 Sail Indonesia committee. It criticized committee members for not taking preemptive measures to handle the incident.

"The event organizer David Woodhouse should have cooperated with the domestic agencies," said director general of destination development, Firmansyah Rahim, as quoted by Kompas.

"The barring of the ships happened because the committee members did not follow the correct procedures," he said. He did not specify the type of punishment his office would take.

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