THE MINISTRY of Finance reports that economic activity in the regions continues to strengthen. This is reflected in the realization of local taxes until the end of February 2023 which was recorded at IDR25.85 trillion. This figure increased by 9.7% when compared to the achievement in the same period in 2022 which was recorded at IDR23.57 trillion.

According to Finance Minister Sri Mulyani, local taxes experienced an increase, especially in consumptive taxes, such as entertainment tax which reached IDR306.07 billion, or increased 61.5% on an annual basis.

“This means that the community has carried out activities for entertainment which then generate tax revenue for local governments,” Sri Mulyani said at the APBN Kita Press Conference, Tuesday (03/14), 2023.

Meanwhile, Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira said that the increase in entertainment tax was indeed caused by community activities that began to normalize and require entertainment expenses or costs.

“In some areas, especially those that become tourism destinations, there are many cultural arts performances, concerts too and it is almost evenly distributed throughout Indonesia. So there is a recovery in mobility that correlates with an increase in revenue from entertainment taxes,” Bhima said Thursday (03/16).

According to him, this increase is also an euphoria for three years of restrained spending related to entertainment. Therefore, people, especially the upper middle class, began to return to entertainment spending.

In addition, the increase in entertainment tax was also driven by automotive exhibition activities which were also restrained during the COVID-19 pandemic.

“So the trend going forward I think is quite positive, we are back to normal. So indeed, if you look at the entertainment tax, it can rise high because of the low base effect, so before PPKM was eliminated, there was already an easing, the mobility was immediately reflected in the increase in entertainment tax revenue, both the central government and at the local government level,” he concluded. [ special]