Rows Of Entertainment Whose Taxes Drop To 10 Percent And Which Increase 40%

Entertainment whose taxes fell to 10 percent (Freepic)

YOGYAKARTA - The implementation of entertainment taxes by 40-75 percent invites a lot of protests from business owners. But besides that, the government also reduced the entertainment tax by 10 percent so as not to burden entrepreneurs. There are several types of entertainment whose taxes have dropped to 10 percent.

The government has set new rules regarding entertainment tax rates or certain goods and services taxes (PBJT). The new policy is contained in Law (UU) Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (HKPD).

The government has regulated that there are several entertainment taxes that have increased and some have been lowered. This tax reduction has also become happy news for entertainment business owners. So what are the entertainment programs whose taxes have dropped to 10 percent?

In the previous regulation in Law Number 28 of 2009, the entertainment tax limit was set at 35 percent. Currently, the government has reduced the entertainment tax to only 10 percent in several business activities.

Lydia Kurniawati Christyana, Director of Regional Taxes and Regional Retribution of the Ministry of Finance, said that the purpose of tax reduction is to uniformize it with consumption-based levies, such as food or drinks, hospitality services, electricity, and parking services.

Based on Article 55 of Law Number 1 of 2022, here are several types of arts and entertainment services whose taxes have dropped to 10 percent:

The difference in the amount of tax rates is determined by considering that the entertainment services above are generally only consumed by certain people. Of course, it is different from types of entertainment services such as karaoke, discotheques, bars, nightclubs, spas or steam baths. These entertainments cannot be enjoyed by all the general public, so they are subject to special treatment for tax levies.

There are several types of entertainment services that have experienced an increase in taxes, as mentioned earlier. The increase in tax rates of 40-75 percent is imposed on special entertainment services such as bars, karaoke, discotheques, nightclubs, and spas.

However, the policy of raising the entertainment tax to 40 percent has drawn a lot of protests from business people. In response to this, reportedly the Coordinating Minister for Maritime Affairs and Investment (Menko Marves), Luhut Binsar Pandjaitan will seek to postpone the entertainment tax.

Luhut argues that the entertainment industry does not only contain discotheques and karaoke. Behind these business activities, there are many workers who seek income in the entertainment industry, both small to medium scale.

Coordinating Minister Luhut revealed that the entertainment tax rules stipulated in the HKPD Law did not just appear. This was stated based on the joint discussion between the government and Commission XI of the DPR.

Luhut said that the law was currently being tested for material at the Constitutional Court (MK) and was taken into consideration by the government in determining the entertainment tax. Luhut said that he did not want the tax rules to burden business actors, especially for those involved and feel the impact.

Those are some types of entertainment whose taxes have dropped to 10 percent. Although the increase in entertainment taxes by 40% has received protests from the public, the government has also lowered the tax rate to 10%. Also read areas that have applied a 40% entertainment tax.

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