Unfair Taxation on Spa Industry Sparks Outcry from Indonesian Entrepreneurs

The Indonesia Wellness Spa Professional Association (IWSPA) is currently advocating for a re-evaluation of the government’s taxation policies concerning spa establishments, expressing significant concern regarding the high entertainment tax rates imposed on their industry.

During a press conference conducted in South Jakarta, Yulia Himawati, the chairperson of IWSPA, emphasized the necessity for a review of the regulations governing the imposing 40-75 percent taxation on entertainment establishments such as discotheques, karaoke lounges, and spas. These regulations, incorporated into Law No. 1 of 2022, are perceived as excessively burdensome by spa entrepreneurs, resulting in disillusionment and frustration within the industry.

The controversy arises from the government’s classification of spas as entertainment, subjecting them to the substantial tax rates. Yulia Himawati conveyed her disappointment with this classification, referencing Tourism Minister’s Regulation No. 11/2019, which identifies spas as part of the wellness industry.

Agnes Lourda Hutagalung, the chairperson of the Wellness Healthcare Entrepreneur Association (WHEA), echoed these sentiments, asserting that the government had failed to consult industry representatives prior to the implementation of the new regulations. According to her, the absence of engagement with stakeholders has impeded constructive dialogue between the government and the affected parties.

The appeal for a revision of these tax laws implores the government to acknowledge and differentiate spas from conventional entertainment establishments, aligning with the objective of promoting wellness and healthcare within Indonesia’s burgeoning industry. Furthermore, the IWSPA seeks assurance that the concerns and aspirations of entrepreneurs are given due consideration, as these decisions bear significant repercussions for both the business and employment sectors.

While recognizing the government’s initiatives to address the matter, the industry anticipates further constructive discussions and the revision of the entertainment tax regulations. The ongoing dialogue between the government and industry representatives is crucial to arriving at a balanced resolution that accommodates the unique characteristics and contributions of spas to Indonesia’s economy.

Amidst these developments, the industry remains committed to engaging in meaningful conversations with the relevant government authorities, endeavoring to safeguard the interests and integrity of the wellness spa industry while fostering a conducive environment for sustainable growth.

As the dialogue progresses, entrepreneurs maintain a cautious optimism about the potential for a harmonious resolution that supports the advancement of the flourishing spa sector while reinforcing Indonesia’s thriving wellness and healthcare landscape.