A judicial review hearing on the Law on Financial Relations between Central-Regional Governments, Thursday (3/14/2024). Photo by MKRI/Ilham W. M.

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JAKARTA (MKRI) — The central executive board of the Indonesian Tourism Industry Association (DPP GIPI) and several legal entities in tourism and service/entertainment wish that Article 58 paragraph (2) of Law No. 1 of 2022 on Financial Relations Between the Central and Regional Governments (HKPD Law), which sets specific goods and services tax (PBJT) rates on certain businesses at 40-75%, be annulled. The Petitioners of case No. 32/PUU-XXII/2024 would like PBJT be capped at 10%, following Article 58 paragraph (1) of the HKPD Law.

“[In] this petition [the Petitioners] wish that Article 58 paragraph (2) of Law No. 1 of 2022 be annulled and thus Article 58 paragraph (1) of Law No. 1 of 2022 applies,” said legal counsel Muhammad Joni at the petition revision hearing on Thursday, March 14, 2024 in the Constitutional Court (MK).

In the petitum, the Petitioners appeals to the Court to declare Article 58 paragraph (2) of the HKPD Law unconstitutional and not legally binding. Before concluding the hearing, Constitutional Justice Enny Nurbaningsih stated that the petition’s continuation would be discussed at a justice deliberation meeting (RPH).

Also read: Business Owners Questions Entertainment Tax Rates

The petition was filed by business owners who represent six legal entities in tourism and service/entertainment: central executive board of the Indonesian Tourism Industry Association (DPP GIPI), PT Kawasan Pantai Indah, CV Puspita Nirwana, PT Serpong Abadi Sejahtera, PT Citra Kreasi Terbaik, and PT Serpong Kompleks Berkarya. They admitted to have had constitutional impairment due to the enforcement of Article 58 paragraph (2) of the HKPD Law.

Article 58 paragraph (2) of the HKPD Law reads, “Specifically, PBJT rates for entertainment services at discotheques, karaoke, nightclubs, bars, and steam baths/spas are set at a minimum of 40% (forty percent) and a maximum of 75% (seventy-five percent).”

“The existing preferential treatment is discriminatory against five types of entertainment and, thus, lead to material and constitutional loss for the Petitioners,” said legal counsel Muhammad Joni at the preliminary hearing on Thursday, February 29, 2024.

The Petitioners believe that discotheques, karaoke, nightclubs, bars, and steam baths/spas are ordinary, not luxury business, and do not need to be controlled. 

Author       : Mimi Kartika
Editor        : Nur R.
PR            : Fauzan Febriyan
Translator  : Yuniar Widiastuti (NL)

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.

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