SEAToday.com, Jakarta-The Jakarta government has established the rate of Specific Goods and Services Tax (SGST) for the entertainment category subject to 40--75 percent for nightclubs, karaoke establishments, bars, and spas.

In response to the wide protests by the entertainment industry, The Coordinating Minister of Maritime and Investment Affairs of Indonesia, Luhut Binsar Pandjaitan on January 17 decided to postpone the implementation of this entertainment tax.

The 40 percent tax regulation was enacted on January 5. It is as outlined in regional regulation number 1 of 2024, concerning local taxes and regional levies, article 53 paragraph 2, signed by the acting governor of DKI Jakarta, Heru Budi Hartono.

Meanwhile, under the previous regulation, namely regional regulation number three year 2015 of the DKI Jakarta Province, the tax rate for nightclubs and bars was 25 percent. The increase up to 40 percent tax was decided, because these types of entertainment only cater to segmented markets, middle and upper-middle classes.

Although The Coordinating Minister of Maritime and Investment Affairs of Indonesia, Luhut Binsar Pandjaitan, has decided to postpone the tax implementation, the industry is still haunted by the possible consequences that might happen in the future.

The Indonesian spa and wellness association had previously filed a judicial review request to the constitutional court, to object to being included in the entertainment industry.

 Meanwhile, the Indonesia Tourism Industry Board is planning to submit a judicial review request this month, to demand the cancellation of Article 53 paragraph 2.(ADELIA/OSWALD)