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Higher tax could shut entertainment spots in Jakarta, Kadin warns
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Swifties, assembled!: Organized by Taylor Swift Indonesia Official Fanbase, The Eras Festival took place at Bengkel Space SCBD, South Jakarta, on Oct. 22, 2023. The one-night-only festivity aimed to emulate the spirit of Taylor Swift's ongoing world tour, dubbed The Eras Tour. (JP/Felix Martua)
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o:p>Businesses have opposed a planned higher tax rate set for parking and entertainment services in Jakarta stipulated in a new bill currently being discussed at the House of Representatives.
Article 41 of the Jakarta special designation bill states that the tax rate for parking services is to be set at 25 percent, while nightclubs, bars, karaoke facilities and spas will be set between 25 and 75 percent.
Under the prevailing rule, the tax rate for parking services is 20 percent, while entertainment businesses are between 25 and 35 percent, as stipulated in the Jakarta regional regulation.
Sarman Simanjorang, deputy chair for regional autonomy at the Indonesian Chamber of Commerce and Industry (Kadin) said on Wednesday that businesses objected to the higher rates stipulated in the new bill. He argued the higher rates would weigh down on entertainment businesses operating in Jakarta.
“Do not let these entertainment businesses become deserted [because they've lost customers]. Some may face the risk of closure if hit with a very high tax rate,” Sarman said, as quoted from Kontan.
Read also: House passes revised IKN Law to future-proof Nusantara against regime change
Lawmakers at the House are working on the Jakarta special designation bill to replace the 2007 Jakarta Capital Law while maintaining the 500-year-old city as the country’s economic center by upholding its designation as an autonomous province.
