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KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

Entertainment Tax Rate Increase

The Yogyakarta Chamber of Commerce and Industry (Kadin) has coordinated with the Chairman of the Indonesian Hotel and Restaurant Association (PHRI) DIY and the Association of the Indonesian Tours and Travel Agencies (ASITA) DIY to ask the government to postpone the 40%-75% increase in entertainment tax rates for discotheques, karaoke, nightclubs, bars and steam baths or spas.

Vice Chairman of Taxation & Customs of Kadin DIY, Deddy Suwadi, said that Kadin DIY objected because the tourism sector had just recovered after the Covid-19 pandemic and was not yet stable. If the entertainment tax rate increases significantly, it will have an impact on operational activities and could reduce foreign tourist visits to DIY.

According to him, the increase in entertainment tax rates is also contrary to the government's efforts to encourage an increase in foreign exchange. This is because tourists will choose to visit other countries such as Thailand and Malaysia.

The increase in entertainment tax will also have an impact on the reduced occupancy of inns and hotels. The impact will also affect other related industries.

Kadin DIY has made two statements regarding the entertainment tax increase. First, the postponement of its implementation in DIY until there is a fiscal policy of the Regional Regulation (Pemda) by involving input from Kadin DIY and Kadin Kabin / City Se-DIY along with all related associations, because the Regional Government has not yet established a Perda based on the provisions of Law No.1 Year 2022 which concerns business actors who have a direct impact on the increase in entertainment tax.

The increase in entertainment tax will increase the tax burden of business actors. Because in addition to the 40 per cent Specific Service Goods Tax (PBJT), entertainment businesses also pay other taxes such as VAT 11 per cent, corporate income tax 25 per cent, personal income tax reaching 5 to 35 per cent depending on taxable income.

Kadin DIY hopes that the Regional Head will provide relief, reduction, exemption and postponement of payment of the principal and / or tax and levy sanctions by taking into account the condition of the taxpayer. This is a form of commitment of the Regional Head to encourage economic growth in his own region.

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KADIN INDONESIA

Indonesian Chamber of Commerce and Industry