Mon, 20 Dec 2010

Hotel rates in Jakarta are predicted to rise following the planned entertainment tax increase scheduled for Jan. 1, chair of the Indonesian Hotels and Restaurants Association Yanti Sukamdani says.

“Hotel rates are expected to increase as well, because who will pay the cost [of the tax]?” Yanti said Sunday, as quoted by

Yanti said the entertainment tax increase does not have support from the industry because the Jakarta administration chose to institute the highest increase, which is 10 percent according to the 2000 law on taxes.

“The Sleman [Central Java] region only applies a 5 percent hotel tax, the same as Malaysia and Singapore,” Yanti added.

The hotel and restaurant association has about 1,000 members.

The Jakarta administration plans to impose the entertainment tax on 39 types of entertainment in the capital starting Jan 1.

Those that will have a 5 percent tax are sports matches, body building competitions and community art shows, while the 10 percent tax will apply to entertainment such as movie theaters, music, magic shows, driving ranges and fashion-related entertainment.

Golf will be taxed at 15 percent and a 20 percent tax will be applied to entertainment facilities such as massage parlors, spas and karaoke and night clubs.