The circulated document pertains to local taxes in Bali, specifically the Local Tax, which is set to take effect on February 1, 2024. Notably, for tax reporting related to December 2023, filed from January 1, 2024, the old tax rates still apply. The new rates primarily impact the field of arts and entertainment, with a substantial increase to 40% tax for entertainment services in venues such as nightclubs, karaoke joints, bars, and spa facilities.
The increase in entertainment tax in Indonesia is part of a broader strategy to increase the country’s own-source revenue (PAD). This strategy includes both intensification and extensification efforts.
Intensification refers to optimizing tax revenue collection for objects and subjects that have already been recorded or registered in the tax administration. On the other hand, extensification is an effort to explore new sources of local revenue.
In addition to the entertainment tax adjustments, the Badung Regency Government in Bali has decided to reduce parking taxes from 25-30 percent to a flat rate of 10 percent. These changes aim to create a more balanced tax structure and support businesses, encouraging continued economic activity in the region.
As the new tax regulations come into effect in Bali, it is crucial for business owners, especially those in the entertainment industry, to stay abreast of the changes and adapt their financial strategies accordingly.
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