Luhut : Government Will Postpone Implementation of 40%-75% Entertainment Tax

January 18, 2024, 10.17 AM | Source: KONTAN.co.id

ILUSTRASI. ? 320 / 5,000 Translation results Translation result Officers and employees simulate the Covid-19 health protocol at a nightlife venue on Jalan Braga, Bandung City, West Java, Friday (3/7/2020). This simulation is in preparation for implementing health protocols in nightclubs ahead of the Adaptation to New Habits (AKB) era. West Java Tribune/Gani Kurniawan

TAX - JAKARTA. The Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan revealed that the government will postpone the implementation of an entertainment tax ranging from 40%-75%.

As is known, the increase in entertainment tax rates has caused an uproar from various parties.

Luhut said, his party has gathered several related agencies to discuss the postponement of the entertainment tax increase.

"Yes indeed yesterday I heard about it and I immediately gathered the relevant agencies about this issue. Including the Governor of Bali and so on. So we want to postpone its implementation," said Luhut on his personal Instagram account @luhut.pandjaitan, Wednesday (17/1).

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He stressed this policy is not only from the government but also through discussions with the Commission XI of the Indonesian House of Representatives. Therefore, this rule will be re-evaluated.

"Then there is also a judicial review to the Constitutional Court (MK), I think we should consider that," he said.

On the other hand, according to him, entertainment venues cannot only be seen from nightclubs alone but small traders who also sell food and drinks will also be affected by this policy. In addition, he also does not see an urgency to increase the intended entertainment tax.

"I think I am very pro with it and I don't see a reason for us to raise taxes from there," added Luhut.

Based on Law Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (UU HKPD). Referring to Article 58 paragraph 2, the specific Goods and Services Tax (PBJT) rate for entertainment services at discos, karaoke, nightclubs, bars, and steam baths/spas is set at a minimum of 40% and a maximum of 75%.

In line with the mandate of the UU HKPD, regional governments have also established regional regulations (perda) to implement the imposition of special entertainment tax rates for these specific services.

Unfortunately, many entrepreneurs protest and object to these rates, which are considered to be able to kill the entertainment business world.