Indonesia has officially scrapped plans to increase entertainment tax between 40-75%.
Tourists and business owners can fully breathe a sigh of relief. A judicial review has been completed, and the tax increase is totally off the cards.
This whole saga began at the beginning of the year. New legislation that was set to be introduced outlined that the entertainment tax would be increased to between 40-75% depending on the type of entertainment venue and service.
The new legislation would have also included spas and some wellness centers as entertainment venues.
Speaking at the announcement of the cancellation, Indonesia’s Minister for Tourism and Creative Economies, Sandiaga Uno, said, “That’s the end of the story. So, thank God, thanks to input from all stakeholders, the President has given directions, and there will be no increase in entertainment tax.”
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He added, “Later, regional governments can determine their own policies, so that business actors do not feel burdened.”
Generally speaking, regency governments in Bali want to see the entertainment sector thrive and are already working on utilizing legal loopholes to support local businesses that would have been negatively impacted by the tax increases.
This is huge news for the entertainment industry overall, but perhaps the businesses that will be most relieved by this news are spas and wellness centers.
Many small business owners in Bali were terrified that the 40% increase would come into effect, leaving them no choice but to close their doors forever.
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Speaking at the National Spa Seminar in Ubud on Wednesday, Sandiaga Uno told spa owners, “There’s no need to worry, hopefully in the future, we can implement quality and sustainable tourism [in different ways]”.
He confirmed that although this part of the policy has yet to be changed, spas will not be classed as entertainment venues. Minster Uno wants to see the spa industry grow and provide even greater services to tourists across the country, but especially in Bali.
The minister explained, “The government’s final position is in accordance with the direction of the internal meeting and the President’s direction that for this spa and certain entertainment industries, there is nothing burdensome in line with the recovery of the tourism sector and the creative economy.”
He added, “This gives the authority to regional governments to make appropriate policies that can strengthen the sector, which opens up many business opportunities and employment opportunities.”
He concluded, “We are waiting for the legal process, but while we are waiting for the legal process, there will be no increase in the tax burden for the spa industry as well as for certain other entertainment service industries.”
This is great news for Bali’s health and wellness sector, which makes up a huge portion of the tourism sector.
Not only do all the major resort hotels have in-house spas, and there are hundreds of independent spas across the island, too, but the wellness sector overall is a huge pull for tourists to Bali.
Tourists from all over the world come to Bali to rest, relax and rejuvenate. In fact, the island has become a home-away-from-home for thousands of people over the years who have needed time and space away from busy corporate jobs and hectic family lives.
Bali has long been a destination where people take their extended sabbaticals or take the time they need to process traumatic events or get their health back on track.
These tourists tend to stay for up to 6 months and are really invested in utilizing the healing and wellness services on offer at Bali’s many spas and retreats.
This scrapping of the entertainment tax means that tourists planning their fun in the sun and relaxation retreats don’t need to adjust their budgets and can tick off everything on their Bali bucket list and more.
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