As reported by detik.com, the Provincial Government of Bali is promising to review recent changes in the tax, categorizing spa businesses as “entertainment enterprises” that are subject to a 40% tax.
The new entertainment category assigned by tax officials to Spa operations in Bal relocates this business sector from its long-held classification as a health and wellness business.
Speaking to the press on Saturday, 06 January 2024, the Head of Bali’s Provincial Tourist Office, Tjok Bagus Pemayun, said: “The problem is why are spas (now) listed as entertainment? Does this mean that spas are now centers of entertainment? That’s why spas are now charged with the entertainment tax.”
Similarly, Karaoke Lounges are also now subject to a 40% tax rate.
Pemayun continued, questioning the new tax categorization, saying that the Balinese Spa business represents local wisdom and cultural values. The tourism chief now fears that the innate value of the local wisdom inherent in Balinese spa operations will be damaged and diminished because of misunderstandings instigated by the new tax treatment.
Pemayun also said he is worried that if the Bali Spa Industry is not protected, local therapists’ jobs will eventually be taken by workers from outside Bali. Pemayun underlined that Bali has always been considered the best spa destination in the world. Adding: “Under the Indonesian Tourism Law, spas are considered by the Ministry of Health as operating on a par with fitness facilities and health centers and are not ‘entertainment’ business.”
Pemayun warns that the 40% tax imposed on Bali’s Spas will be very burdensome for Bali spa operations, especially the many spas operating outside hotel premises.
Pemayun said he hopes the tax code revision can soon come under urgent review and be revised back to the former lower level.
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