Law No. 18 of 2025 Passed, Tourism Revolution and Foreign Tourist Levy

Introduction

On 29 October 2025, the Government enacted Law Number 18 of 2025 on the Third Amendment to Law Number 10 of 2009 on Tourism (“Law 18/2025”). This regulation revises the previous tourism legal framework to ensure its relevance to global dynamics and transforms Indonesian tourism into tourism that is quality-driven, inclusive, and sustainable.

The implementation of tourism had not fully applied sustainability principles and had not placed culture as a key asset. The Government considers it necessary to take strategic measures to build a tourism ecosystem that is adaptive to digital transformation and capable of strengthening the national economy without compromising environmental preservation and local values.

 

Comparison

Law 18/2025 amends Law Number 10 of 2009 on Tourism (“Law 10/2009”) as amended by the Job Creation Law. There are changes to the principles of tourism administration, the addition of provisions on tourism villages, and the introduction of levies for foreign tourists. The following table presents a comparison between Law 18/2025 and Law 10/2009:

 

Key Provisions

Implementation of the Tourism Ecosystem and Quality Tourism

Law 18/2025 introduces the concept of a “Tourism Ecosystem” as a system that supports the orchestration of national tourism administration. Under Article 8, the development and enhancement of tourism must be carried out based on an integrated ecosystem, which includes planning, destination management, industry strengthening, and the use of information technology. Article 7 (3) provides that such development aims to realize “Quality Tourism,” namely tourism that prioritizes competitive products and services, sustainability, unique experiences, and high added value.

Formalization and Classification of Tourism Villages

Articles 17M to 17R regulate that local communities may develop tourism destinations based on culture, nature, and man-made attractions through the establishment of Tourism Villages or Tourism Hamlets. The Government classifies tourism villages into four levels, as follows:

1. Rintisan Tourism Village;
2. Developing Tourism Village;
3. Advanced Tourism Village; and
4. Independent Tourism Village.

Levy on Foreign Tourists (Tourism Levy)

Under Article 57A, the Government may impose a levy on foreign tourists, and the collected funds must be managed and used exclusively for tourism development activities, including promotion, event organization, and environmental and cultural conservation. The mechanism for collection and management will be further regulated in a Government Regulation.

Incentives for Tourism Businesses

Article 17A provides that the Government and Regional Governments may grant incentives to Tourism Businesses to stimulate investment. Such incentives may include fiscal incentives (taxation) and non-fiscal incentives (licensing facilitation, immigration, and infrastructure) pursuant to statutory regulations, with the aim of improving the competitiveness of the national tourism industry.

Mandatory Digitalization and Use of Technology

Under Article 17K, the Government, Regional Governments, and the public must utilize information and communication technology in the development and implementation of tourism. This includes the availability and dissemination of integrated tourism data (National Tourism One Data), which forms the basis for policymaking.

Legitimacy of Event Creation and Sports Tourism

Law 18/2025 expands the definition of tourist attractions by adding “Event Creation” as an essential element recognized by law. Articles 17W through 17Z provide that event organization now constitutes part of Tourist Attractions to support quality tourism. Under Article 17Y (2), event creation includes a wide spectrum of activities, ranging from cultural celebrations, art performances, meetings, incentives, conventions, and exhibitions (MICE), education, to sports performances (sports tourism). Furthermore, Article 17X (2) provides that the Government and Regional Governments may grant incentives to service providers engaging in such event creation to support periodic and sustainable activities.

Elimination of Sanctions and Criminal Provisions

Under Law 10/2009, Chapter XIV regulated sanctions such as warnings, business restrictions, and temporary suspensions for tourists or businesses who violated the rules. However, Law 18/2025 removes Chapter XIV on Administrative Sanctions and Chapter XV on Criminal Provisions. Consequently, the administrative and criminal sanctions in Law 10/2009 no longer apply. The provisions on “Prohibitions” have also been removed (Chapter VII Part Three). In Law 10/2009, this section contained Article 27, which listed prohibitions relating to the destruction of tourist attractions.

 

Transitional Provisions

Under Article 69, all implementing regulations of Law 10/2009 as amended by the Job Creation Law remain in effect insofar as they do not conflict with the provisions of Law 18/2025. The Government is granted a maximum period of two (2) years from the enactment of Law 18/2025 to issue new implementing regulations.

 

Closing

Law 18/2025 shifts the tourism paradigm from pursuing the quantity of visits to prioritizing quality tourism and ecosystem sustainability. For businesses, this regulation opens opportunities through business incentives and the formalization of tourism villages, while also requiring adaptation to digitalization obligations and stricter competency standards. This law balances economic benefits through foreign tourist levies with cultural and environmental preservation, enabling tourism businesses to align their business models with sustainability principles and local wisdom to remain relevant and competitive.