If passed, the law would be the first of its kind in Muslim-majority Indonesia. There may be some exceptions to the ban for travellers, customary activities and religious rituals.
But the introduction of the bill has sparked uproar within Indonesia's tourism and hospitality industries, which warn tourism would be crippled if the law was passed.
Political groups in Indonesia are pushing for a nationwide prohibition of alcohol.
"If the bill is passed, our business will be done," Indonesian Hotel and Restaurant Association head Hariyadi Sukamdani told the Jakarta Post.
"The tourists drink alcohol all the time. It will be very inconvenient for them if they can't find alcohol."
Indonesia has already made moves to restrict the availability of alcohol. Last year it outlawed the sale of alcohol in mini marts, despite an outcry from tourism and alcohol industries. Hariyadi said that alone had struck a blow to tourism, and travellers were already complaining about how difficult it was to find booze.
"No matter how beautiful the country is, if they can't find alcohol, they won't want to come here," Hariyadi said.
In a desperate bid for compromise, liquor sellers have begged the Indonesian government to consider tougher monitoring and control on the sale of alcohol, rather than full-blown prohibition.
Liquor sellers in West Java held an emergency meeting last week to discuss the new bill.
One woman, who said she made a living selling beer, told the Post: "I don't mind regulations. But don't apply a total ban because it will kill my business. If you want to regulate selling, I would be ready to comply."
Others have complained about raids on sellers who had liquor licenses that were difficult to obtain.
Indonesia's beverage importers also warned their already ailing industry would be crippled if the law was passed.
Imported liquor contributes to up to 10 per cent of Indonesia's liquor consumption and as many as 17 beverage importers and distributors are expected to collapse in the wake of a booze ban.
Representatives for Indonesia's tourism and hospitality industries warn prohibition would merely cause sales in bootlegged booze to skyrocket, with potentially deadly consequences.
Due in part to the increasing cost of importing liquor, Bali has seen a rise in the sale of
home-brewed drinks laced with methanol, which have been linked to the deaths and serious illness of tourists, including Australians, on the party island.
Last month, Perth woman Jen Neilson was rushed to intensive care in a Bali hospital with suspected methanol poisoning after a night of drinking.
On New Year's Eve in 2013, Perth teenager Liam Davies died after drinking alcohol cut with methanol in a Lombok bar. Perth woman Tess Mettam went blind for two days after drinking two cocktails at a Kuta Bar in December 2013, and Newcastle teenager Jackson Tuckwell also went blind after being poisoned in 2014.
The family of British backpacker Cheznye Emmons, who died in Bali from methanol poisoning, raised $20,000 to print and distribute educational posters around Indonesia warning revellers of the dangers of alcoholic drinks with potentially lethal amounts of methanol.
Dangerous levels of methanol in cheap drinks served throughout Bali has prompted the Australian Government to warn tourists to "consider the risks" of alcoholic drinks and avoid homemade brews.
"Cases have usually involved local spirits and spirit-based drinks, such as cocktails, but supposed brand-name alcohol can also be adulterated," the government's Smartraveller website warns, adding that adulterated arak — a traditional rice-based spirit — was also linked to a number of tourist deaths, as well as a huge number of Indonesians every year.
Association of Beverage Importers and Distributors chairman Agus Silaban told the Jakarta Post last week the proposed law would trigger "rampant liquor smuggling practices and the illegal distribution of bootleg liquor".
The nation's beer sellers have argued that their product should be exempted from the ban as beer was not linked with poisoning cases.
Indonesia Institute president Ross Taylor told news.com.au moves to ban booze in Indonesia had support, and not just from religious groups.
