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Entertainment tax put on hold, Luhut says
The coordinating maritime affairs and investment minister said he saw no reason to hike the tax on the entertainment industry.
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Domestic and foreign tourists throng Canggu Beach in Badung regency, Bali, on June 4, 2020, despite the mobility restriction to curb COVID-19 infection. (Antara/Fikri Yusuf)
T
he government has decided to postpone increasing the entertainment tax rate, which was slated to take effect this January, Coordinating Maritime Affairs and Investment Minister Luhut Binsar Panjaitan said on his Instagram account on Wednesday.
He said the government had met with several stakeholders, including the Bali governor, and it had decided to evaluate the policy for the time being.
“We will collectively assess what the impact [of the increased entertainment tax] would be, especially for small business owners,' Luhut said.
Luhut said the tax hike would affect many, extending beyond the entertainment businesses itself, such as small and medium enterprises (SMEs).
Therefore, Luhut said, he saw no reason to hike the tax on the entertainment industry.
The hike originated from Article 58 in the 2022 law on fiscal relations between the central government and regions (HKPD), which stipulates a rate of between 40 and 75 percent for the specific goods and services tax (PBJT) on entertainment services, such as karaoke spaces, night clubs, bars and spas.
The previous regulation in 2009 only stipulated a 75 percent rate cap for these businesses but with no minimum lower bound
