The Jakarta Provincial Government has introduced a series of tax discounts for hotels and restaurants in the capital, aimed at strengthening economic growth and ensuring business sustainability.
The policy is formalised in Governor’s Decree No. 722 of 2025, signed by Governor Pramono Anung on Monday, 25 August 2025.
The decree provides a reduction of between 20 and 50 per cent in specific goods and services tax obligations for the hospitality and food and beverage sectors. The first scheme offers a 50 per cent reduction in hotel service tax liabilities from 25 August until September 2025.
As reported by CNBC, from October until December 2025, the reduction will fall to 20 per cent. In addition, food and beverage services will enjoy a 20 per cent reduction from August until the end of the year.
“This decision was made to maintain the continuity of taxpayers’ businesses in the hotel and restaurant sector, while supporting Jakarta’s economic growth,” Governor Pramono stated at City Hall. “Today, I signed Governor’s Decree No. 722 to ensure that businesses can remain healthy and competitive.”
Requirements and Impact of Tax Discounts
Businesses seeking to access the incentives are required to submit a statement declaring their willingness to report transaction data electronically through the e-TRAP system, which is already widely used in Jakarta.
Pramono emphasised that the measures are both an economic stimulus and a form of recognition.
“It is not because I am complaining, but rather because I am surprised that the level of tax compliance in Jakarta is very high. Because payments are going well, I am providing incentives. This is a form of appreciation as well as a way to maintain a healthy business climate,” he said.
He added that the decision was taken after careful consideration of the contribution the hospitality and restaurant sectors make to the city’s economy. According to government data, the sector contributes around 14 to 15 per cent to Jakarta’s economic growth, a figure that stands above the national average.
The Governor expressed his hope that the tax relief will help businesses maintain stability during a period of economic uncertainty.
“I hope that the business world in Jakarta can continue to survive and grow well,” he said.
The incentives underline the government’s broader strategy of encouraging investment and supporting sectors most directly linked to Jakarta’s international competitiveness as a tourism and business hub.
By reducing costs for hotels and restaurants, the government aims to boost demand, attract more visitors, and protect jobs in industries that employ tens of thousands of residents.
