A Closer Look at the Overcharge Service Vat and Tax in Indonesia

Share:

Eating out at a nice Bali restaurant is such a heavenly experience. However, it could turn fast into a nightmare when the restaurant overcharges you with their service tax. There are many cases in Bali where the restaurant overcharges their customer with service charge to the point where you will get a little heart attack when you see the bill. 

Restaurant tax or PB1 is not a PPN or Value Added Tax. The 10% tax is a local one known as PB1 or PHR (Hotel and Restaurant Tax). It is gathered by a Kabupaten (Regency) or a City, such as DKI Jakarta or Denpasar, Bali, which is different than service tax. Technically, it is not a Value Added Tax (VAT), but it appears to be one from the customer’s viewpoint.

The hotel or restaurant gathers the service tax. This tip will be distributed to the employees at the end of the month. There are no guidelines as to how it should be done. Some companies will distribute it equally among all employees, from the workplace to the kitchen. Some do not and instead choose to give it to a few workers.

Find more about Indonesia service tax and vat rate here

The Service charge ranges from 5% at a restaurant to 10% at a hotel. A restaurant or spa within a hotel will also have to pay 10%. Some independent restaurants may gather more than 5% of the service fee to encourage their employees. It is also a method for a business proprietor to raise wages without using their own money.

Overcharge service tax bill
Source Quora

In Jakarta, five-star hotels may pay each staff up to IDR 4,000,000 monthly. Even better, the Saint Regis Hotel in Bali is said to have a service tax that can reach IDR 7,000,000 per staffer during the finest months. The fact that the service tax makes up most of the pay in many well-known hotels and eateries is unquestionable.

However, most restaurants in Bali will charge you 11% of service charge at every purchase to round up the number. This unruly behavior leads most guests to get overcharged and paid much more than it is supposed to. It’s been a long and ongoing discussion on how bad fraud behavior is in this industry.

Interested about this topic? Check out our other articles: 

Related News

A fire destroyed a pesticide storage warehouse in Taman Tekno, Block K3, Number 37, Setu District, South Tangerang City, on Monday, 9 February. Authorities say the incident has affected the surrounding environment, including a nearby waterway connected to the Cisadane River. Residents reported changes in the river’s condition shortly after the blaze. The water reportedly […]

A group of 32 dugongs has been recorded in the waters surrounding Romang Island, Southwest Maluku Regency, Maluku Province. The finding marks the largest dugong population ever documented in Indonesia and is believed to be the biggest recorded aggregation in Southeast Asia to date. The discovery was made by a research team from the World […]

Singapore police have detained a female driver in connection with a traffic accident in Chinatown that killed a six-year-old Indonesian child, the Indonesian Embassy in Singapore confirmed on Tuesday. Rizki Kusumastuti, a representative of the Indonesian Embassy responsible for information, social affairs, and culture, said the Singapore Police Force (SPF) is still investigating the incident […]

A woman died after losing control of her motorcycle while being chased by suspected pickpockets in North Kuta, Bali. The incident occurred on Jalan Pengubengan Kauh, Kerobokan Kelod Village, Badung Regency, on Saturday night, February 7, 2026. The victim was identified as Juhaeryah Velina, 46, a resident of Saga, Balaraja District, Tangerang Regency, Banten. She […]

Expat Events

Indonesia Visas

Expat Event

Social Networking
150,000
Mövenpick Hotel Jakarta City Centre
Unofficial Event
FREE
from the Southern Cliffs of Melasti, to the serene black sands of Lovina
Funlethic
200.000
Social Padel House Setiabudi

Indonesia Guide

Just For Fun

Write For Us

Exclusive Promotions

Event Gallery