Jakarta. Tourism and Creative Economy Minister, Sandiaga Salahuddin Uno, has reassured that the recent increase in the entertainment tax rates for service providers will not adversely affect the tourism sector.

Sandiaga stressed that the government's objective with this policy is to empower and boost prosperity, rather than impede business development. "There's no need to worry, we will continue to offer support," said Sandiaga Uno, as reported by Antara on Thursday.

Under the law governing Financial Relations between the Central Government and Regional Governments (HKPD), the goods and services tax for entertainment venues like nightclubs, karaoke lounges, bars, and spas are now set at a minimum rate of 40 percent, and a maximum of 75 percent. Previously, the law had stipulated an entertainment tax ranging from a minimum of 10 percent to a maximum of 35 percent.

The adjustment in tax rates for entertainment services took effect on Dec. 8, 2023, as the tourism sector is gradually recovering from the Covid-19 pandemic.

"It is crucial to communicate information about this entertainment tax policy but rest assured, it will not hinder business activities in the tourism sector," said Sandiaga.

To bolster businesses in the tourism sector, the government is committed to maintaining a conducive industrial environment and providing incentives, recognizing the significant role the tourism sector plays in job creation.

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