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Businesses refuse to obey sharp hike in entertainment taxes

Jakarta Globe - January 23, 2024

Alfida Rizky Febrianna, Jakarta – Leisure service providers won't obey the recent tax hikes until the Constitutional Court issues a ruling over a legal motion challenging the government's decision, prominent industry players said on Monday.

The government recently imposed tax hikes on nightclubs, bars, karaoke houses, and spas to reach 40-75 percent, from only 15 percent previously.

Hariyadi Sukamdani, chairman of the Indonesian Tourism Industry Association (GIPI), urged regional governments to delay imposing the hikes until there is a court ruling.

"The hike has been imposed without prior consultation with us or any open communication with the affected industry. There was never a public dissemination about the plan to raise the tax," Hariyadi said after a meeting with Chief Economic Minister Airlangga Hartarto in Jakarta.

"While the case is being discussed at the Constitutional Court, regional governments should refrain from imposing the hike," he added.

Hariyadi was accompanied by celebrity lawyer Hotman Paris Hutapea, who owns an entertainment business in Bali, former singer Inul Daratista, who runs karaoke houses across many cities, and dozens of executives from the sector.

Hotman said President Joko "Jokowi" Widodo wasn't fully informed about the tax hikes and was "unhappy".

"I received that information from the chief economic minister last week," Hotman said, referring to Airlangga.

He went on to say that Home Affairs Minister Tito Karnavian has issued a circular instructing all regional government leaders to return to the previous taxes.

Other senior government officials, including Chief Investment Minister Luhut Binsar Pandjaitan and Tourism Minister Sandiaga Uno, have urged the new taxes to be put on hold.

Luhut argued earlier that the House of Representatives, not the government, initiated the tax hikes.

Source: https://jakartaglobe.id/lifestyle/businesses-refuse-to-obey-sharp-hike-in-entertainment-taxe