Through the Jakarta Revenue Agency Head Decree No. 257/2025, the city has imposed a 10 percent goods and services (PBJT) tax on 21 types of commercial sport and recreation, slotting them under the same tax category as concert and amusement parks. The legal basis is found in Law No. 1/2022 on financial relations between central and regional governments, which allows local authorities to tax specific goods and services under broad categories like “entertainment”.

Yet when sport is taxed like a spectacle, the issue is no longer legal form. It is public meaning that raises harder questions: When government go looking for new tax bases, what do they choose to see? What do they choose to ignore?

Classification is central to how Indonesian tax law operates. It determines whether something is taxed, at what rate and under what rationale. Jakarta’s PBJT regime draws its authority from national law, but the problem lies in how that authority is exercised. The issue is not whether the city may impose the tax, but how it defines or fails to define, and what it is taxing.

“Entertainment,” as used in both the national statute and local decree, is a broad and slippery term. Traditionally, it has covered concerts, shows, exhibitions and other forms of passive amusement. The recent inclusion of sporting activity stretches that definition, both conceptually and legally.

Fitness classes, futsal bookings and yoga sessions involve physical participation, often with health or community benefits. Yet the new decree reduces these activities to their commercial wrapper and aesthetic value, treating them as spectacles rather than forms of public utility.

This is not just a semantic issue. When classification becomes untethered from substance, the legal rationale for taxation begins to fray. By flattening the distinction between passive entertainment and participatory sport, the policy risks converting a fiscal convenience into a doctrinal contradiction.