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Tourists Fear New 40% Entertainment Tax In Bali Will Ruin Vacation Fun

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Indonesia is set to make a whopping increase to the country’s entertainment tax.

The national entertainment tax will now range from 40-75%, and entertainment businesses in Bali and the tourism sector are unhappy about it. 

Beachfront Beach Club Apartment Resort Complex in Berawa Canggu Bali.jpg

There are genuine fears that this steep hike in Indonesia’s entertainment tax will negatively impact businesses nationwide.

The goods and services tax for the entertainment sector (PBJT) applies to discos, karaoke, nightclubs, bars, steam baths, and spas.

This 40% tax will be applied to tourists’ bills at nightclubs, spas, some beach clubs, and other specific entertainment venues.

Without a doubt, budget-conscious Bali lovers will start looking elsewhere for a vacation destination if more fees are applied to the tourist experience in the province.

This year sees the introduction of the Bali tourism tax, an additional IDR 150,000 per person; this is on top of the visa-on-arrival fee, which sits at IDR 500,000. 

Tourists are already discussing amongst themselves how Bali is not as affordable as it once was. With Bali lovers chatting online about the rising prices of a bottle of water, a classic Bintang beer, and entry tickets to top attractions, a 40% tax chucked on top of what is supposed to be a fun day out on vacation will likely ruin the mood. 

The General Treasurer of HIPMI Bali, Agung Bagus Pratiksa Linggih, spoke to reporters about the proposed legislative changes.

He has mixed feelings about the massive tax increase and noted that it may not be the right option in the long run, especially since Bali is only just recovering from the impacts of the pandemic. 

Linggih told reporters, “The government must prove that Bali’s tourism services and facilities are number one in the world, then it can justify the highest tax value in the world.”

He added, “Our competitiveness against other tourism destinations is reduced because we charge high prices without adequate facilities. Bali’s main competitor is Thailand, which has actually reduced entertainment taxes by up to 5% because Thailand is aware that tourism in its country supports high taxes.”

The General Treasurer of Bali spoke candidly and told reporters, “I don’t think this policy is the right alternative. There should be a relaxation of taxes and an increase in government spending.”

“This is actually a recession, instead of increasing taxes and reducing government spending by 15%. MSMEs, especially in Bali, will be the victims. Not to mention, tourists will be charged for waste management later.”

Up to 70% of initial funds generated by the Bali tourism tax will be sent to solving the island’s waste management issues. 

Pile-of-trash-on-Seminyak-Beach

He continued, “Bali is currently recovering; this policy actually has a bad impact. Moreover, our image has just been tarnished due to last year’s New Year’s traffic jams. Society is already having difficulties, and it is getting more and more difficult.”

“The first victims are the lower middle class, especially MSMEs. One thing that must be underlined is that Bali is not overloaded with tourists. The hotels in North Bali are only 50% full. With this law, economic equality is hampered because only Badung and Gianyar benefit.”

“Tourists will be lazy about exploring because of the high costs, resulting in regional income inequality getting worse.”

Woman walking through grounds of a hotel in ubud, bali

These entertainment taxes would make it more costly for tourists and Indonesian citizens to enjoy nightlife entertainment.

This mirrors the government’s desire to promote more high quality, high spending, and sustainable tourism, making it more costly to go out drinking and parting in Indonesia, inherently discouraging lower-budget tourists who want to get drunk and party.

However, the implications are more wide-reaching than that. 

It is not only the General Treasurer of Bali who is dubious about the 40% entertainment tax but big players in the tourism industry too.

Celebrity lawyer, TV host, and businessman Hotman Paris, the co-founder of Atlas Beach Club in Canggu, has also spoken out about how a 40% entertainment tax would impact travelers’ capacity to enjoy their time in Bali to the max.

Atlas-Beach-Club

Hotman Paris and his legal teams are planning to submit a judicial review to the Constitutional Court (MK) if President Joko Widodo does not heed the pressure to issue a Perpu (emergency legislation) to stop the new rates being introduced. 

Paris told reporters, “The fastest solution is Perpu because if you wait too long for the material test, even before the election, Mr. Jokowi will provide something that will really help the people,” 

“Because the tourism industry is a sector that is enjoyed [by everyone], not large-scale industries such as coal, gold and banking. It is a people’s industry,” he said.

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Kami

Monday 22nd of January 2024

I was just in Bali last week (1-2024). Traffic is horrible and motor bikes chasing you down on the sidewalks; there is no safe place for tourists to walk! Cars park randomly all over, causing major traffic jams every where. There are a lot of other places for vacationers to relax: Thailand, Philippines, etc

Firechef

Tuesday 23rd of January 2024

@Kami, Ya, that's the REAL way it is in Bali, not the Government lies about the island of the gods. It's the island of garbage and he'll. Thailand, Philippines Malaysia and Vietnam are much better choices.

Josh

Monday 22nd of January 2024

So, way over half the people who would have gone to such venues now won't - meaning much bigger losses than any tax hikes could gain.

Jody

Friday 19th of January 2024

Thailand: cleaner, less traffic, not as humid/cooler, cheaper... Bali is dirty, expensive with so much traffic... which is why after 3 years I chose to leave...

Lee

Friday 19th of January 2024

Time for Aussie to go elsewhere and teach this government a lesson. Greedy in nature and then want Australia help in the event of a disaster. Bit rich.

Karen

Friday 19th of January 2024

This tax will not be implemented. Like the ban on treking mountains. It is a thought bubble and should not have been released. Tourists will not accept 40% tax on their party bill, and will go elsewhere. Bali will wake up to this.