Entertainment Tax Increase, Which Stock Issuers Are Affected?

ENTERTAINMENT TAX - JAKARTA. The government has raised the entertainment tax rate with the lowest range of 40% and the highest of 75%. This policy will certainly impact the performance of several issuers whose businesses are related to the entertainment sector.

Kiwoom Securities Indonesia's President Director Changkun Shin said, the issuers of bars and alcoholic beverages are most affected by the plan to increase the entertainment tax, which is set at a minimum of 40% and a maximum of 75%. 

Meanwhile, for hotel services, arts services, and entertainment, it is estimated that the impact will not be too significant because the highest rate is only set at 10% from previously 35%. 

In addition, he mentioned that based on data from the Central Statistics Agency (BPS), foreign tourist visits in Indonesia reached 917,000 as of November 2023. This number increased by 30.17% year-on-year (YoY).

“So that it can still support the performance of hotel issuers. However, for entertainment issuers such as discos, nightclubs, and bars, it will burden the income of alcoholic beverage issuers, because the largest contribution to their income is in that segment,” said Shin when contacted by Kontan.co.id, Wednesday (24/1). 

Shin believes, the imposition of the new tax rate will reduce the profit margin of alcoholic beverage issuers. 

Read Also: Crypto Hackers Stole Around $1.7 bln in 2023 - Report

Moreover, on the other hand, based on data from BPS, the trend of alcohol consumption has continued to decline in the last 5 years until 2022. This is also evident from the performance of liquor issuers which has been declining since September 2023, even their profit growth has contracted. 

Shin recommends a wait and see approach for PT Hatten Bali Tbk (WINE) shares, with support at Rp 376 per share and resistance at Rp 446 per share. 

He also recommends holding PT Multi Bintang Indonesia Tbk (MLBI) shares with a target price of Rp 8,425 per share.