Entertainment Tax Rises, Government Prepares Incentives For Entrepreneurs

Coordinating Minister for the Economy Airlangga Hartarto (Photo:dok. Antara)

Coordinating Minister for Economic Affairs Airlangga Hartarto received the aspirations of associations and business actors in the field of hospitality and entertainment services at the Coordinating Ministry for the Economy Office, Monday, January 22, 2024.

Also present on the occasion were the General Chairperson of the Indonesian Tourism Industry Association (GIPI) Haryadi Sukamdani, as well as a number of representatives of hotel and entertainment services entrepreneurs such as Hotman Paris Hutapea and Inul Daratista.

Following up on the decision of the Internal Meeting chaired directly by President Jokowi on January 19, 2024, which discussed the response and objections of business actors related to the implementation of the Certain Goods and Services Tax (PBJT) for entertainment services.

Furthermore, the government will provide fiscal incentives in the form of reducing the tariff on entertainment Goods and Services Tax (PBJT) as stated in Law No. 1 of 2022 concerning Financial Relations of Central and Regional Governments (HKPD).

"We have received all the inputs. I asked for the solution earlier with the SE of the Minister of Home Affairs. When at the Palace, I said that there would be a SE, and the Regional Head could refer to the SE of the Minister of Home Affairs," said Airlangga in his official statement, Monday, January 22, 2024.

Airlangga said that based on the provisions of Article 101 of the HKPD Law, it was clearly regulated that Regional Heads in terms of positions could provide fiscal incentives in the form of reducing the principal of regional taxes.

This has been confirmed by the Minister of Home Affairs through Circular Number 900.1.13.1/403/SJ dated January 19, 2024, to the Regional Governors of DKI Jakarta and the Regent/Mayor.

Thus, based on existing regulations, Regional Heads have the authority given by the HKPD Law to reduce PBJT rates on Entertainment Services whose rates are 40 percent to 75 percent

With this authority, the Regional Head can reduce the tariff of PBJT entertainment to the previous tariff. The provision of fiscal incentives by reducing the tariff of PBJT entertainment is sufficient to be determined by Perkada.

Thus, the implementation of the authority of the Regional Head is sufficient to refer to the HKPD Law, PP Number 35 of 2023 concerning General Provisions for Regional Taxes and Regional Retribnusion, and Circular Letter of the Minister of Home Affairs Number 900.1.13.1/403/SJ dated January 19, 2024.

Furthermore, Airlangga said that the Ministry of Finance together with related ministries/agencies are currently completing a study to provide tax incentive support for the Tourism Sector in the form of PPh for the DTP Agency (Government Borne).

The amount of the tax incentive for the DTP Agency is 10 percent, so the amount of the corporate income tax tax rate will decrease to 12 percent from the normal rate of 22 percent.

"This is expected to be able to provide fresh air for business actors and can maintain a conducive business climate," he concluded.