Indonesian Minister of Tourism and The Creative Economy, Sandiag Uno, has released the preliminary results of a study performed by the Ministry addressing the impact of recent proposals to dramatically increase the sales tax in the entertainment, tourism, and spa sectors.
During the Minister’s weekly press briefing in Jakarta on Monday, 05 February 2024, and quoted by Beritabali.com, Sandiaga said research conducted on tax impact included the participation of experts from the National Research and Innovation Agency (BRIN).
Interim results of the inter-agency study support Minister Sandiaga and the Coordinating Minister for the Economy’s shared desire to reduce the sales tax on the tourism sector to 10%.
Commenting further on the study’s results, Sandiaga said: “From the government side, we have submitted several recommendations, namely providing incentives and maintaining investment stability and continuity in organizing events.”
Sandiaga warned that dramatically higher tax rates sought by provincial officials on the entertainment, spa sector, and event management activities would eventually serve as a disincentive to new investment. Reduced investments would, in turn, diminish employment in the tourism and creative sectors.
Sandiaga confirmed that the Bali Provincial leaders, regency officials, and city government figures are coordinating to create fiscal incentives using provincial, regional, and metropolitan regulations.
Sandiaga hopes the results of his study will be emulated in other regions, such as Labuan Bajo, to support new investment through lower tax rates.
Sandiaga supports the removal of spa businesses from the entertainment industry classification. “We go to the spa for fitness, not entertainment!” said the Tourism and Creative Economy Minister.
From the interim study results, the Minister of Tourism and Creative Economy stated that his Ministry supports the Coordinating Ministry for the Economy’s proposal regarding a tax reduction of 10 percent from PPh for the tourism sector.
He also supports the removal of spa businesses from the entertainment industry classification.
Because we go to the spa for fitness, not entertainment, that’s what we hope for, so friends ask for your support,” said the Minister of Tourism and Creative Economy.
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