PBJT Replaces PB1, Lower Rates and Broader Scope in Jakarta

The Jakarta provincial government has abolished the Entertainment Tax (PB1) and introduced the Specific Goods and Services Tax (PBJT) effective for the 2025 tax year. The change is stipulated in Regional Regulation No 1 of 2024 and follows the 2022 Central‑Local Finance Relations Law. The new regime applies throughout Jakarta.

PB1 was previously governed by the 2009 Regional Tax and Retribution Law, with rates ranging from 10 % to 75 % depending on the type of entertainment, the highest rates applied to bars, night clubs and discotheques. PBJT expands the tax base to include food and drinks in restaurants, hotel services, electricity and parking, and sets a standard rate of 10 % with a 40 % rate for night‑time entertainment. The restructuring aims to achieve fiscal fairness and eliminate overlapping tax objects.

Electronic reporting under PBJT is expected to simplify tax administration and improve the accuracy of regional revenue. Lower rates for the entertainment sector give businesses more room to grow, while more predictable income can fund infrastructure, education and health projects. Jakarta’s government and residents should benefit from greater transparency and legal certainty.