SINGAPORE, 24 January 2024: Indonesia backpedals on a proposed entertainment tax hike ranging from 40 to 75% following intensive lobbying by tourism and restaurant associations and tourism leaders in Bali. The proposal has now been shelved pending a review.
After Bali’s tourism and hospitality leaders warned it would deter tourism recovery, the central government intends to reevaluate the controversial 40-75% hike in entertainment taxes.
First reported by the Bali Sun, the central government confirmed this week the tax increase has been shelved. At the same time, legislators say they evaluate the impact on the public, tourism and small businesses across the country.
Bali, the country’s premier tourism destination, can breathe a sigh of relief. Still, the threat has not gone entirely, and tourism officials on the holiday island are warning that tinkering with taxes when other ASEAN countries are reducing them is risky. They quote Thailand’s endeavours to cut its enormous taxes on alcoholic drinks, including wine, as it aims to attract close to 40 million tourists in 2024, up from 27.8 million in 2023.
Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, is quoted by the Bali Sun saying in an Instagram video: “We decided to postpone it, we are evaluating…There is a judicial review in the Constitutional Court. Let us consider that we are siding with the people because it concerns a lot of small traders.”
Until a decision is made on introducing a 40 to 75% rate, the entertainment tax will remain at the old rate of 15%. The ceiling rate of 75% would apply to discos, karaoke, nightclubs, bars, steam baths and spas.
Bali Sun said the government wants to update the policy by setting a lower limit of 40% and an upper limit of 75%
Other taxes and charges
Hotels and restaurants in Indonesia add 10% to the bill for services at hotels and restaurants across the country. It’s included in the listed price so you won’t be surprised by an extra charge at checkout.
Two other charges impact tourists visiting popular destinations in Indonesia — Visa-on-Arrival fees and a new tourist tax that will generate environmental and culture protection revenue.
Tourist tax
Effective 14 February, a new tourist tax will be introduced in Bali and five other destinations — Lake Toba, Borobudur Temple, Mandalika, Labuan Bajo, and Likupang.
Amount: IDR150,000 (approximately USD10) for foreign tourists per visit.
Payment: Electronically at designated points, like airports or immigration checkpoints.
Purpose: Funds will support environmental protection, cultural preservation, and infrastructure improvement in tourist destinations.
Visa on Arrival fees
Cost: IDR500,000 (approximately USD33) for most nationalities.
Scope: Required for most nationalities wishing to visit Indonesia for up to 30 days.
(Certain nationalities may require different visas or visa extensions with different fees. For example, citizens from nine ASEAN countries enjoy visa-free travel to Indonesia for 30 days.)
