DPP GIPI Proposes Material Test Of Entertainment Tax Determination Rules To The Constitutional Court

The Central Board of the Indonesian Tourism Industry Association (DPP GIPI). (Between/HO/DPP GIPI)

JAKARTA - The Central Board of the Indonesian Tourism Industry Association (DPP GIPI) submitted a Material Testing to the Constitutional Court (MK) on regulations that stipulate certain Goods and Services Tax rates (PBJT) for arts and entertainment services businesses.

Based on the press release, Tuesday, the regulation is Article 58 Paragraph (2) of Law Number 1 of 2022 which states that specifically the PBJT tariff for entertainment services at discotheques, karaoke, nightclubs, bars, and steam/spa baths is set at a minimum of 40 percent, and a maximum of 75 percent.

The amount of the tax, considered by entertainment business actors, through the GIPI DPP, is too burdensome, and hopes that the article will be revoked, so that the determination of the PBJT tariff is the same, which is between 0'10 percent.

"This is certainly not appropriate because it has an impact on discrimination against business actors who have run their businesses according to applicable regulations and laws. The impact of high tax determination is that entertainment businesses will lose consumers and end up closing their businesses and the number of workers in the entertainment sector who will lose their jobs," said DPP GIPI Chairman Hariyadi BS Sukamdani, quoted by Antara.

On the other hand, Hariyadi said that Indonesia, which is currently struggling to recover in the tourism sector after the COVID-19 pandemic, has experienced new problems in competing and creating tourism competitiveness with other countries whose entertainment taxes are much lower.

Several countries, according to him, actually lowered tax rates in order to grow the tourism sector and create competitiveness with other countries.

Hariyadi said, then the GIPI DPP will immediately issue a Circular for entertainment entrepreneurs (discotek, karaoke, nightclubs, bars, and steam baths/spa) who experience an increase in taxes in their area due to Law Number 1 of 2022 to pay taxes using the old tariff.