The Future of Indonesia Tourism: Massive Taxes and Less Visitors?

Bali Tourism Tax
Bali Tourism Tax
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The price-conscious visitors from Australia, ASEAN, or even Europe and North America had seen Bali and the rest of Indonesia as an affordable and attractive vacation destination. This may change soon.

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It appears politicians in Indonesia are playing Russian roulette with the travel and tourism industry of their country.

A 40-75 percent local entertainment tax is about to be implemented. It seems to be designed to discourage visitors from coming to Bali and having drinks and fun. Like every destination, everyone is looking for higher spending visitors, often forgetting this number mix may not always work.

Especially when it comes to getting a massage or wellness treatment, the government in Jakarta or Bali is aggressively looking for higher-spending visitors and more sophisticated health tourism.

Numerous initiatives to make Indonesia a medical tourism destination are on the rise, but the implementation, potential, and infrastructure have not been tested or put in place yet.

This may be a wrong approach and could backfire since it will punish many of those who are considered “unskilled” labor, such as those working in nightclubs, and karaoke places.

The government however agrees to put the implementation of such a tax on the side to discuss more details.

In the meantime, some spa owners in Bali already are taking legal action on their behalf.

The Hotel and Restaurant Association sees the danger of massive job losses, saying the tax increase is too high to be ignored by travelers. It will influence overseas tour operators and travel providers to recommend competing destinations to their clients – and there are plenty.

In an interview with Al Jazeera, Bali travel and tourism leaders see this tax-raising initiative as another unexpected challenge with enormous consequences after businesses just adjusted to a new profitable normal after the COVID vacuum.

Just in December, Indonesia introduced a new 60-day tourist visa to encourage visitors to stay longer. There are no reports that this is turning out to be a success.

Experts say corruption and favoritism on having to pay such taxes is another way of influencing politicians, specifically knowing of upcoming elections in the country.

It’s feared companies targeted for the taxes may be cherry-picked depending on their political affiliation and stand.

The future of tourism in Indonesia may once again come into a suspense state, or better it may be time to visit the Islands of the Gods before the tax increase and enjoy a Spa Treatment.

About the author

Avatar of Juergen T Steinmetz

Juergen T Steinmetz

Juergen Thomas Steinmetz has continuously worked in the travel and tourism industry since he was a teenager in Germany (1977).
He founded eTurboNews in 1999 as the first online newsletter for the global travel tourism industry.

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