Badung. Amid the controversy surrounding the proposed increase in entertainment tax rates to 40 percent-75 percent, the Badung Regency Government in Bali has declared that it will maintain the current tax rate at 15 percent.

"In response to the concerns raised by our tourism stakeholders in these sectors, we are currently formulating legal instruments to address their objections, as instructed by the Regent. We are seeking legal avenues to alleviate the burden in line with our fiscal policy," said Adi Arnawa, the Secretary of the Badung Regency Government, as reported by Balipuspanews.com, a part of the B-Universe media network, on Thursday.

Adi Arnawa made this statement after participating in a meeting with the Minister of Home Affairs Tito Karnavian and the Deputy Minister of Finance Suahasil Nazara regarding entertainment taxes on Thursday.

Adi Arnawa has instructed relevant authorities to promptly formulate tax relief measures for entertainment venue owners.

According to him, the payment of certain entertainment taxes in Badung Regency will be set at 15 percent, aligning with the previous tariff. The local government aims to finalize this framework soon, inviting business stakeholders for a comprehensive discussion on specific entertainment tax rates.

While acknowledging that Badung may miss its regional revenue targets, Adi Arnawa said that the main concern of the regency is the development of tourism post-Covid-19 era.

"We are not only focused on increasing revenue but also considering the social aspects for entrepreneurs who are just starting to recover. This has multi-dimensional impacts, including the support to farmers linked to these businesses. Based on these considerations, we will attempt, as instructed by the Regent, to ease the burden on taxpayers in Badung as much as possible, even though we need the revenue," he said.

Badung Regency encompasses renowned tourist areas such as Canggu, Nusa Dua, Kuta, Legian, Seminyak, Jimbaran, Tanjung Benoa, and more. Notable establishments potentially affected by this policy include Finns, Atlas Beach Club, Savaya, Cafe del Mar, Potato Head Beach Club, Red Ruby, Double-Six, and many others.

The government has officially established the entertainment tax rates for the current year, ranging from 40 percent to 75 percent, covering nightclubs, karaoke houses, spas, and bars. This regulation was implemented in early January 2024, with the actual rates to be determined by regional governments.

This policy has faced criticism from various parties, including Atlas Beach Club owner Hotman Paris Hutapea.

"Many middle to lower-income citizens will suffer if the tourism sector does not progress. Thailand has even lowered the entertainment tax to just 5 percent, and the alcohol tax has been reduced. Tourists are heading to Dubai, Thailand, and Malaysia; Bali seems a bit quiet," Hotman Paris said recently.

Tourism and Creative Economy Minister Sandiaga Uno advised regional governments to delay the implementation of the entertainment tax rates until the Constitutional Court (MK) releases the outcome of the judicial review submitted by industry stakeholders.

The Indonesian Hotel and Restaurant Association (PHRI) and the Indonesian Spa Therapists Association (ASTI) are preparing to submit a judicial review regarding the law.