Observer: Entertainment Tax 40-75 Percent Has A Negative Impact On Regional Economic Growth

Illustration. (Photo: Freepic)

JAKARTA - Economic observer from Mulawarman University Purwadi Purwoharsojo assessed that the implementation of the entertainment tax of 40-75 percent regulated in the Law on Financial Relations between the Central Government and the Regional Government (UU HKPD) had a negative impact on regional economic growth. "If the tax raised is extraordinary like that but macroeconomic growth is still low, it must be difficult for the business of entrepreneurs themselves or for consumers," said Purwadi, in Samarinda, East Kalimantan, quoted from Antara, Thursday, January 18. According to Purwadi, the increase in entertainment taxes is not in line with macroeconomic conditions that have not fully recovered from the impact of the COVID-19 pandemic. He assessed that high entertainment taxes will burden entrepreneurs and consumers, especially in metropolitan cities such as Samarinda and Balikpapan. "Because indeed our economic conditions have not been fully recovered, we have just recovered from COVID-19," said Purwadi.Purwadi explained, high entertainment tax will increase consumer burdens enjoying, drinking, or spending on certain products. "The problem is like that, the final blow will target consumers," he said. Purwadi stated, regional income relies more on taxes and prices of goods as a source of state revenue, without maximizing the potential of natural resources it has. He suggested that the government should focus more on tax incentives for large entrepreneurs investing in the natural resources sector.

Purwadi hopes that the government will not make unilateral decisions without discussing with employers regarding the implementation of the entertainment tax. He wants a dialogue between the government and entrepreneurs to find solutions that do not harm all parties. "I don't think this should be done unilaterally without discussing with entrepreneurs first, because those who know better the real conditions in the field," he said again. If the entertainment sector entrepreneur is surprised by the significant tax increase policy, of course there must be a way out, sitting at the same table, so that there is no burden, to all parties, because this is for the sake of positive economic growth.