Bali's Economy in the Pandemic Period

Bali is a world-famous tourist destination for a long time. Some even say "Where is Indonesia, Bali?" There are innumerable hotels in Bali, from guest house class to five star diamond class. Hotels in Bali take turns entering the list of the best hotels throughout the world, and there are no responsibility for two hotels in the top 10 of the world's best hotels in 2018 based on the assessment of Luxury Travel Intelligence (LTI). The popularity of Bali as a destination for both domestic and foreign tourists, making the central and local governments, continue to make infrastructure that "spoiled" investors who want to invest in property, as well as travelers who come to Bali. Tourism is the mainstay sector of the Province of Bali, and it is definitely a hotel and restaurant tax (PHR) being the largest component of revenue contributor for the government of Bali Province. The high income from the tourism sector, as if "annulling" other sectors in Bali, call it agriculture, fisheries, and other sectors. The adverse impact of dependence on the tourism sector was finally felt during the Covid-19 pandemic, where the economic conditions of Bali in 2020 plummeted, similar to the conditions at the time of the Bali Bombings I and II.

The decision of Indonesian government to release PHR for 33 regencies / cities that intersect with 10 priority tourist destinations for six months from March 2020 to September 2020 is certainly very detrimental to the Province of Bali, especially for Badung, Gianyar and Denpasar City, where PHR is a component of regional revenue that become a mainstay. APBD corrections and program adjustments will definitely be made in this 2020 budget year. Take for example the Regency of Badung could lose up to 1.6 Trillion revenues from PHR in Quarter I to Quarter II during this policy.

The government has provided a solution to the implementation of this policy by providing grants totaling 3.3 trillion to ten priority destinations (including Bali). But is the 3.3 trillion fund sufficient to "patch up" the hole in the APBD, as well as generate tourism in Bali? Because Covid-19 not only resulted in a decrease in hotel occupancy in Bali which resulted in a decrease in PHR, Covid-19 also caused the layoffs of hotel employees, the inability of the hotel to pay debts to suppliers which affected the number of suppliers who had to lay off employees and not a few were out of business, other than that, the income of companies related to other accommodations, such as travel agents, vehicle rental, aviation services, etc. also experienced a significant decline due to this pandemic.

Other taxation policies such as providing incentives in the form of a reduction in income tax installments article 25 for corporate taxpayers (WP) by 30% for certain types of companies (one of which is tourism related industries) through the Minister of Finance Regulation No.23 / PMK.03 / 2020 also does not fully provide the maximum impact for corporate taxpayers. Although 30% of Article 25 Income Tax has been reduced, there are still many WP Entities that cannot meet the tax obligation in paying Article 25 Income Tax because a lot of Taxpayers in Bali are already inoperative or half-operated during this pandemic so as to avoid paying Article PPh installments 25, it is difficult to pay employee salaries and credit at the bank every month. So it is necessary for the government to formulate new policies related to this.

If concluded, the PHR exemption policy for six months took effect in March 2020 and the provision of incentives to reduce Income Tax Article 25 by 30%, which has been explained above is indeed a positive goal, at least the wheels of the economy in areas that become tourist destinations, especially in the Province of Bali, keep spinning . But if you look deeper, the first policy will have a very negative impact on the Bali government because the absence of PHR will be a burden for the provincial government of Bali which has been "saved" by PHR. With no main income for the six months to September 2020, infrastructure spending will automatically be difficult to realize during the pandemic. The absence of infrastructure spending will have an impact on the decline in services and facilities that can be enjoyed by the community. Then, the policy to reduce PPh Article 25 installments is indeed quite easy for the WP WP, but what about the WP WP that does not operate at all during the pandemic? Do they still have to pay when there is no income at all even to the point of loss? Because in the PMK there is no verse that states if the WP Agency that suffers a loss does not need to pay PPh Article 25 installments. This then raises the question, what should I pay for?

The Covid-19 outbreak had an impact on all lines of life, especially in the Province of Bali. Covid-19 is also an alarm for the government of the Province of Bali to not continue to depend on the tourism sector. After this pandemic ends, other sectors must also be prioritized in the short-term plans as well as the long-term plans of the Provincial Government of Bali. Do not continue to ignore agriculture, fisheries, MSMEs, etc., because a strong economy is certainly not an economy that is supported by only one sector.