Spas in Bali Hit with 40% Tax Levy

Spas in Bali Hit with 40% Tax Levy

Hotel and Restaurant taxes (PHR), road illumination charges, and parking retribution are being revamped in Bali and broadly reclassified as “taxes on specific services” (PBJT).

Reflecting changes now being introduced Island-wide, the Gianyar Regency Office for Management of Regional Revenue, Finance, and Assets (BPKAD-Gianyar) is holding educational seminars to familiarize taxpayers with the significant changes in tax rates and collection protocols.

Hotel and Restaurant Taxes (PHR) added to each guest’s bill at check-out remain constant at 10%, while entertainment tax (pajak hiburan) will reduce to 10% from current levels of 12-12.5%. A group of specific activities such as discotheques, karaoke, nightclubs, bars, and saunas/spas, now broadly classified as “entertainment,” will now be subject to a very high tax rate of 40%.

The chief of BPKAD-Gianyar, I Gusti Bagus Adi Widhya Utama, told NusaBali.com that the education and socialization of local tax rates is being done to make local businesses understand their tax obligations under Law Number 1 of 2022, establishing new tax rates and introducing a new tax nomenclature.

Hotel and Restaurant Taxes (PHR), entertainment tax (pajak hiburan), roadway illumination taxes (pajak penerangan jalan), and parking taxes are all now classified as “taxes on specific services (PBJT).” The PBJT broad classification includes food and beverage services, electricity supply, hotel accommodation, parking fees, entertainment and cultural shows.”

In some circles, it is feared that the very high tax rate of 40% will serve as a disincentive to legitimate spa operators and threaten ongoing efforts to make Bali a global spa and wellness destination.

The hotel and restaurant tax will remain at 10% in the Regional Regulations. Entertainment tax, which used to be 12-12.5%, has dropped to 10%. However, entertainment such as discos, karaoke, nightclubs, bars, and steam baths/spas will increase substantially.

Plans are also afoot to rationalize Land and Building Tax assessment and rates (PBB).

quote In some circles, it is feared that the very high tax rate of 40% will serve as a disincentive to legitimate spa operators and threaten ongoing efforts to make Bali a global spa and wellness destination.

Moves to charge a 40% tax rate on spa and sauna service have sparked concern and dismay among those operating the Island’s many legitimate spas and wellness centers. In some circles, it is feared that the very high tax rate of 40% will serve as a disincentive to legitimate spa operators and threaten ongoing efforts to make Bali a global spa and wellness destination.

Source: balidiscovery.com

1 Comment

  1. alan james says:

    bali will suffer badly for this tax