Increase in entertainment tax will not affect Balinese spa salons

Last week, scaring representatives of the spa industry with a significant increase in the tax, officials quickly made amendments to the taxation and announced their support for the spa business.
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Minister of Tourism and Creative Economy Sandiaga Salahuddin Uno stated that the spa industry in Bali will not be subject to an increase in the entertainment tax from 40 to 75 percent. He emphasized that spas in Bali fall under the fitness category, not entertainment. Other officials, in particular the head of the Bali Tourism Department, also confirmed that spas will be classified as health facilities.
Sandiaga responded to the question of whether Law No. 1 of 2022 on financial relations between the central and regional governments (HKPD) is killing the spa industry. He emphasized that his team is confident that the philosophy of this policy is aimed at the development and prosperity of business,not its destruction.
"Don't worry. We will still provide support for entrepreneurs in the spa industry," he said.
According to the minister,the Balinese spa industry uses herbs and oils produced in accordance with local cultural traditions. Sandiaga also explained that his team is developing spa products through health and sports tourism, all of which falls under the beauty sector in Bali.
"We continue to promote this wellness tourism because, as I noticed in Dubai yesterday, therapists from Bali, Lombok, and other places are of great interest abroad thanks to our global reputation," he said.
Bali Provincial Tourism Department head Tjok Bagus Pemayun also expressed his opinion, stating that the Bali spa center entrepreneurs association objects to including the spa industry in the entertainment category. In his opinion, the spa is considered an industry that combines the traditions and culture of Indonesia. If spa centers are classified as entertainment enterprises, it may affect the public perception of the spa business, as well as the professionalism of the specialists working in it and other aspects.
It should be noted that at the beginning of the month, regional authorities in Indonesia decided to increase the tax on certain goods and services (PJBT) from 15 to 40 percent. Spa salons were included in the list of taxed services. The owners of Balinese beauty salons were shocked by such a sudden tax increase and reacted with a collective protest to the innovation.
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