Groundwater Tax Rates Surge, Hotel Industry Urges Government to Reconsider
JAKARTA, KOMPAS.com - The policy of increasing groundwater tax (PAT) in several regions is beginning to face opposition from business actors, particularly in the hotel and restaurant sectors.
Amid weakening consumer purchasing power and hotel occupancy rates that have yet to recover, the tax burden increase is seen as potentially adding pressure to business sustainability.
Business actors believe that the policy has not fully considered field conditions.
The General Chairman of the Central Board of the Indonesian Hotel and Restaurant Association (BPP PHRI), Haryadi B Sukamdani, stated that the high groundwater tax imposed by the government will cause hotel operational costs to rise.
Moreover, this situation occurs amid low consumer purchasing power.
“Our businesses could go bankrupt. The operational burden we bear will be very heavy, while occupancy rates are declining,” he said in an official statement on Thursday (9/4/2026).
Business actors hope that the government opens space for dialogue to determine a more proportional increase amount. He also assessed that the government should not raise the groundwater tax without considering the PDAM water supply that has not yet met the needs of the hotel sector.
This condition makes many hotels still dependent on groundwater.
“With high operational costs, hotels must carry out efficiencies. One efficiency measure is reducing employee working hours,” he said.
The Chairman of PHRI Banyuwangi, Zaenal Muttaqin, said that the change in the payment scheme from levies to usage-based taxes has significantly increased the burden on business actors.
“But now we are required to install water meters and pay taxes based on usage that is much higher than previous rates and is progressive in nature. Meanwhile, we are drilling on our own land,” he snapped.
In the Special Region of Yogyakarta (DIY), the groundwater tax increase also refers to the Governor’s Regulation of DIY Number 21 of 2025. The Chairman of PHRI DIY, Deddy Pranowo Eryono, mentioned that the tax increase becomes an additional burden for business actors.