Sandiaga Asks Regional Heads To Give Entertainment Business Incentives

JAKARTA - Minister of Tourism and Creative Economy Sandiaga Uno recommended regional heads to provide fiscal incentives to alleviate certain entertainment taxes no later than mid-February 2024.

"So that the percentage amount is adjusted to the conditions of each region, district and city, and is set no later than mid-February 2024," said Sandiaga Uno at a weekly press conference of the Minister of Tourism and Creative Economy as reported by ANTARA, Monday, February 5.

The Minister of Tourism and Creative Economy hopes that local governments will immediately provide fiscal incentives and suppress certain Entertainment Taxes so as not to cause a lot of unrest in the community. For regions that apply a certain Entertainment Tax of 40 percent, local governments can provide fiscal incentives of 30 percent.

"So, the cashback is 30 percent," he said.

Sandiaga is worried that if there are no quick steps to provide fiscal incentives to reduce certain Entertainment Taxes, there can be business closures that result in reduced labor or layoffs (offs).

"That's our recommendation to local governments, and there are local governments in Bali that have implemented it," said Sandiaga.

The provision of incentives can be based on the principle of ease of investing and implementing events.

Sandiaga's statement is in line with the Circular Letter of the Minister of Home Affairs of the Republic of Indonesia Number 900.1.13.1/403/SJ concerning Guidelines for the Implementation of Certain Goods and Services Taxes on Specific Arts and Entertainment Services, which was published on January 19, 2024.

Quoted from the circular, there is a statement that regional heads have the opportunity to provide fiscal incentives as stipulated in Article 101 paragraph (1) of Law Number 1 of 2022.

The regulation mandates that in supporting investment facilities policies, governors/regents/mayors can provide fiscal incentives to business actors in their regions.

"The policy is in the local government," said Sandiaga.

On Friday (26/1), Coordinating Minister for Economic Affairs Airlangga Hartarto said entertainment entrepreneurs could get incentives that could prevent them from paying taxes of 40-75 percent.

Then, the government also prepared fiscal incentives for the Agency Income Tax (PPh) for entertainment service providers.

For the tourism sector, the government will provide a tax reduction in the form of providing government-borne facilities (DTP) of 10 percent of the corporate income tax, so that the amount of corporate income tax of 22 percent will be 12 percent.