Minister of Tourism and Creative Economy (Menparekraf), Sandiaga Salahuddin Uno, is actively pursuing an exemption for the spa industry from the 40-75% entertainment tax. He emphasizes that this sector does not fall under the entertainment category but is distinctly classified as a vital part of the tourism business. This assertion is grounded in Article 14, paragraph 1, letter m of Law No.10/2009 on Tourism.
Sandiaga, in an official statement on Wednesday (31/1/2024), highlights that this classification aligns with the Ministry of Tourism and Creative Economy Regulation No.4/2021 on Business Activity Standards in the Implementation of Risk-Based Licensing in the Tourism Sector. He expresses confidence in reinforcing this stance through a judicial review in the Constitutional Court.
While awaiting the legal process, Sandiaga assures that there will be no additional tax burdens imposed on the spa industry and other specific entertainment sectors like karaoke and nightclubs.
On a broader scale, he anticipates that supporting the spa industry will play a crucial role in accelerating the achievement of the target number of international tourists (foreign tourists or “wisman”) to Bali. Sandiaga projects that Bali can contribute significantly, aiming for 7 million foreign tourist arrivals to Indonesia in 2024.
The Ministry of Tourism and Creative Economy (Kemenparekraf) has set an ambitious target of attracting 14.3 million foreign tourist visits to Indonesia in 2024. Bali is expected to play a pivotal role, accounting for 50% of the government’s overall target.
“In aggregate [tourist visits] in Bali, this contributes 50% [to the national target for foreign tourist visits]. So around 7 million,” states Sandiaga in a written announcement on Wednesday (31/1/2024).
To expedite this tourism goal, Kemenparekraf is actively working to enhance accessibility to Bali. This includes initiatives such as increasing international flights and introducing thoughtfully designed tourism packages that avoid the negative impacts of overtourism. This strategic approach aims to uphold quality and sustainable tourism, concurrently creating an estimated 4.4 million jobs in the creative economy sector by 2024.
In the backdrop of these efforts, certain spa associations had previously expressed reservations, citing concerns about the spa industry’s categorization as art and entertainment services. This objection stems from Article 55, paragraph 1, of Law No.1/2022 on the Financial Relations between the Central Government and Regional Governments.
Chairman of the Indonesian Spa Therapists Association (Asti), Mohammad Asyhadi, underscores the distinction between spas and entertainment. As highlighted in Ministerial Regulation No. 4/2021 on Business Activity Standards in the Implementation of Risk-Based Licensing in the Tourism Sector, spas are not classified as entertainment, further emphasizing the uniqueness and significance of the spa industry in the broader tourism landscape.