Jakarta Raises Tax on Nightclubs, Entertainment Venues up to 40%
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17 January 2024 11:54 WIB
TEMPO.CO, Jakarta - The Jakarta government has officially increased the tax for entertainment venues, such as discotheques, karaoke lounges, nightclubs, bars, and spas to 40 percent as per the Regional Regulation (Perda) No. 1 of 2024 signed by Acting Governor of Jakarta Heru Budi Hartono on January 5, 2024. The policy is effective upon its promulgation.
Under the previous regulation, Perda No. 3/2015, the tax for discotheques, karaoke lounges, nightclubs, bars, live music venues, and live music venues with DJs was 25 percent, while for massage parlors and spas was 35 percent.
“Specifically, the PBJT (certain goods and services tax) rate for entertainment services at discotheques, karaoke lounges, nightclubs, bars, and spas are set at 40 percent,” reads Article 53 (2) of the regulation.
PBJT is a tax levied on consumers. The regional government collects five types of PBJT, namely food and/or beverages, electricity, hotel services, parking services, and arts and entertainment services.
The tax for other entertainment activities, such as movie theaters, art shows, massage parlors, and others was set at ten percent. However, Jakarta's 40 percent entertainment tax only applies to cum suis discotheques.
Lydia Kurniawati Christyana, the Director of Regional Taxes and Regional Levies at the Ministry of Finance, said that the tax hike was in line with the revision of the Law on Financial Relations between the Central Government and Regional Governments (UU HKPD) issued in 2022.
Discotheques, karaoke lounges, nightclubs, bars, and spas are subject to 40-75 percent tax because these types of entertainment activities are enjoyed by certain communities, namely the middle and upper-middle classes. Meanwhile, the tax on other entertainment types is actually decreased, from 35 percent to a maximum of 10 percent.
The tax hike has been widely protested by the entertainment industry. Spa entrepreneurs in Bali filed a judicial review to the Constitutional Court (MK) on Friday, January 5, 2024. They requested that the spa industry be excluded from the entertainment sector and instead, be included in the health or wellness sector.
AMELIA RAHIMA SARI
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