$SrBi_2Ta_2O_9$ thin films were etched in $Cl_2/CF_4/Ar$ inductively coupled plasma (ICP). The maximum etch rate was 1300 ${AA}/min$ at 900 W ICP power in Cl$_2$(20%)/$CF_4$(20%)/Ar(60%). As RF source power increased, radicals (F, Cl) and ion ($Ar^+$) increased. The influence of plasma induced damage during etching process was investigated in terms of P-E hysteresis loops, chemical states on the surface, surface morphology and phase of X-ray diffraction. The chemical states on the etched surface were investigated with X-ray spectroscopy and secondary ion mass spectrometry. After annealing $700^{circ}C$ for 1 h in $O_2$ atmosphere, the decreased P-E hysteresises of the etched SBT thin films in Ar and $Cl_2/CF_4/Ar$ plasma were recovered.