The recent decision to increase the entertainment tax to 75% in Batam has raised concerns among local business owners, who are apprehensive about its impact on international tourism.
The Secretary of the Indonesian Hotel and Restaurant Association in the Riau Islands, Yeyen Heryawan, expresses concerns over the abrupt increase in entertainment tax rates in Batam and its potential repercussions on the influx of international tourists.
Yeyen Heryawan criticized the sudden and unannounced policy change, fearing it could deter tourists due to higher costs compared to neighboring countries.
Asian countries like Malaysia, Singapore, and Thailand have lower entertainment taxes, below 10%, to attract more international visitors.
The tax increase might negatively affect Batam’s tourism industry, which is currently the third most visited city in Indonesia by international tourists after Jakarta and Bali.
The Indonesian Ministry of Tourism has set an ambitious target of 3 million international tourist visits to the Riau Islands in the current year.
Read More: Batam Raises Entertainment Tax to 40% for Selected Sectors
Additional challenges, such as expensive flight and ferry tickets and high visa-on-arrival costs in Batam, could compound the issue, potentially diverting tourists to neighboring countries.
The drastic hike in entertainment tax in Batam raises concerns about the affordability and appeal of the city as a tourist destination. This could result in a shift of tourist flow to more tax-friendly neighboring countries, impacting Batam’s tourism economy.
The recent implementation of a 75% entertainment tax in Batam has sparked worries among local business communities, fearing a decline in international tourism. This move contrasts with the lower tax strategies employed by other Asian countries to attract tourists. The tax increase, combined with other existing challenges in Batam, could lead to a significant shift in the region’s tourism dynamics.
Source: Tempo, Garuda News 24 (2024)
