Indonesia halts massive entertainment tax hike after tourism backlash
The Indonesian government has decided to postpone the implementation of sweeping entertainment tax rises after an outcry from tourism industry leaders.
Bali’s hotel industry had warned the island’s economy could potentially collapse if the proposed hike went ahead.
There was a proposal to increase it from 15 to at least 40%.
It would have impacted venues such as karaoke lounges, nightclubs, bars, and spas.
Gusti Agung Ngurah Rai Suryawijaya, chair of the Indonesian Hotel and Restaurant Association recently said it could spell disaster for the Bali tourism economy.
“This will surely cause the economy in Bali to collapse again because 60% of the people are highly dependent on the tourism sector.”
“Frankly speaking, nearly 1.2 million of Bali’s 4.3 million residents work in the tourism sector and subsectors, so this needs to be decided carefully,” Suryawijaya added.
Certain venues could have potentially seen the tax rise to 75%.
Suryawijaya said it would have priced venues out of the market, likely leading to a drop in tourists.
Bali welcomed about 5.28 million tourists in 2023.
Now, Coordinating Minister Luhut Binsar Pandjaitan said the government will hold off on imposing the tax rises.
It will now be re-evaluated and then go to a judicial review, he said.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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