Jakarta, CNBC Indonesia – The Indonesian Tourism Industry Association (GIPI) will issue a circular (SE) to its members who are affected by the provisions of Article 58 Paragraph 2 of Law Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (HKPD).
The SE contains an appeal for members who are affected by the 40% – 75% tax rate provisions in the HKPD Law, to pay entertainment tax according to the normal rates usually charged previously. Before the HKPD Law came into effect, special entertainment tax rates were contained in the Regional Tax and Regional Retribution Law (PDRD).
GIPI General Chair Hariyadi Sukamdani said that his organization oversees 36 associations, but the circular will be specifically addressed to the entertainment services industry specifically in discos, karaoke, nightclubs, bars and steam baths/spas with a tax set at a minimum of 40% and a maximum of 75%. % in Article 58 paragraph 2 of the HKPD Law.
“We will issue a circular to all entertainment service providers affected by Article 58, in essence we urge them to pay tax rates according to the old rates,” said Hariyadi at the Constitutional Court (MK) Building, Jakarta, Wednesday (7/2/2024).
According to him, this circular letter will be used as a reference for affected entertainment entrepreneurs, until the lawsuit process or judicial review of Article 58 paragraph 2 of the HKPD Law is completed before the Constitutional Court. However, he has not yet received a schedule for when the judicial review will be held by the Constitutional Court.
“So we estimate that this will probably be a long process after the election dispute process is finished, then this possibility can be discussed by constitutional judges. For this reason, we will also issue a circular later,” said Hariyadi.
Hariyadi said that there was no other option for entrepreneurs to pay taxes outside the provisions of Article 58 paragraph 2 of the HKPD Law. Because, according to him, there will be no special entertainment services that can survive with a minimum tax rate of 40% and a maximum of 75%. In the PDRD Law, the maximum entertainment tax rate is 75%, but there is no minimum limit of 40%, because the minimum limit is only 0%.
“We can stop operations. Well, we are avoiding that, that's why we made a circular stating that our position is to continue paying entertainment tax but will follow the old rates for now,” he said.
“We're going to be annoying, that's all because this is a matter of life and death for companies, if the government makes the rules good, we don't want people to lose their jobs,” stressed Hariyadi.
He also hopes that, while the judicial review process at the Constitutional Court is ongoing, the regional government will also stipulate provisions for fiscal incentives in accordance with Article 101 of the HKPD Law. The SE will also be set until the fiscal incentives come out so that the tax rate does not reach 40%.
GIPI has carried out a material review of Article 58 Paragraph 2 of the HKPD Law today, Wednesday (7/2/2024). The touchstone used is Article 28 paragraph 1 concerning fair legal certainty; Article 28 i paragraph 2 concerning the prohibition against carrying out discriminatory actions; Article 28 g paragraph 2 concerning protection of assets under his control; Article 28 h paragraph 1 concerning health services; and Article 27 paragraph 2 concerning the right to work and a life worthy of humanity.
[Gambas:Video CNBC]
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