Entertainment tax cut to boost hotel business

Entertainment tax cut to boost hotel business

JAKARTA (JP): The reduction of entertainment taxes from 25
percent to 15 percent, based on a new tax regulation, will
benefit hotels by increasing the numbers of customers to
discotheques, bars and other entertainment venues at hotels.

The chairman of Jakarta's Hotel Controllers Association, Diyak
Mulahela said Tuesday that the new regulation, to be effective
April 1 this year, clearly stipulated which transactions were
subject to entertainment taxes, although he did not give details.

"Moreover, the reduction of the taxes would lead to a
reduction of food and beverage prices," Diyak was quoted by
Antara as saying.

The new provincial regulation No. 7/1996 on the arrangement of
establishments and entertainment taxation will replace the old
provincial decree No. 1/1986.

Helmy AR Syihab, chairman of Commission C for financial
affairs, told The Jakarta Post yesterday that the new decree was
made to help businessmen.

"Nowadays people can buy advanced technology and enjoy
entertainment like karaoke and home-audio visual studios at their
homes. This has had a heavy impact on entertainment businesses,"
Helmy said.

He said the decree was passed last year.

Diyak said hotels and their entertainment venues sold food and
drink at higher prices due to the 25 percent tax. "This inflicted
losses on consumers," he said.

Diyak, who is also director of the Tourism Information
Development Institute, said that karaoke bars, music rooms and
cafes managed by hotels and restaurants would be subject to 10
percent tax. "While a 15 percent tax will be imposed on those
managed by other parties," he said.

In this way, he said, the new decree would benefit visitors to
the entertainment centers.

According to December 1996 records, Jakarta has 244 hotels
with 21,278 rooms, 15,107 in star-rated hotels. (sur/ste)