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Bali Grapples With Illegally Operating Tourist Accommodation Businesses

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Bali is in the process of cracking down on badly behaved tourists and foreigners breaking the conditions of their visas on the island.

As part of the strategy, authorities in Bali are also investigating the apparent rising number of illegally operating accommodation businesses that are owned and operated by both local people and foreigners. 

Room in Private Villa Bali.jpg

In Buleleng Regency, the authorities are investigating and auditing accommodation providers in the areas.

According to data revealed by the Tourism Task Force in Buleleng, the majority of accommodation businesses in the Regency do not yet have a Business Identification Number (NIB) and Regional Taxpayer Identification Number (NPWPD).

This means that they are operating outside of the law and in most cases not paying the relevant Hotel and Restaurant Taxes. 

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Speaking to reporters on Tuesday 5th September, the Head of the Buleleng Tourism Service, I Gede Dody Sukma Oktiva Askara, said that it is not only hotels, villas, and B&Bs that are not registering their businesses properly.

He noted that quite a few long-term accommodations and boarding houses are marketed online and have not been included in the Task Force’s data collection. Buleleng Regency is home to popular destinations like Lovina Beach and Munduk.

Askara said that the Task Force is working on finding accommodation businesses that are not registered business entities by looking at social media, accommodation booking platforms, Google Maps, and anecdotal reports.

He confirmed that the Task Force is following up on businesses suspected of operating illegally that are owned by both local people and expatriates. 

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Askara explained, “There are many problems below. The cases vary. The task force went down accompanied by personnel who knew the area. So, for those who have been found and have not met the administrative requirements for NIB and NPWP, we will educate them. The Licensing Service and the Regional Financial and Revenue Management Agency will continue to follow developments.”

Not all accommodation outlets suspected of breaking the law could be visited during the first round of site visits from investigators.

Aksara said that more spot checks will be conducted in due course. The Task Force will be focusing on star-rated hotels and accommodations with more than ten rooms first, then working down to investigate the paperwork of smaller properties. 

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Askara shared his hopes that the operation will help better control accommodation in Buleleng Regency and collect tourism taxes that can be used to further support the local economy.

While Buleleng Regency is not the busiest tourism regency in Bali, it is not the only area that is investigating tourism accommodation businesses. 

In Badung Regency, home to resorts like Canggu, Seminyak, Legian, Kuta, Uluwatu, and Nusa Dua, investigations are also underway. Spot checks on private rental villas in and around Ubud have also been happening for the last few months. 

Luxury-Hotel-Pool-in-Ubud-Jungle

In June this year, Bali’s Governor Wayan Koster announced a crackdown on illegally operating tourism accommodations in Bali in a bid to collect tax revenue the provincial government is owed.

Speaking at the time Governor Koster said, “There are many illegal villas in Bali, there are even homestays where many tourists stay, and the hotel-restaurant text is not imposed, which is detrimental.”

He added, “That’s why the Regents and Mayors have been asked to file records of illegal villas and homestays.”

This is something that both foreign-owned and locally-owned accommodation businesses must take seriously.

Villa-in-Bali

Many foreigners have invested in accommodation properties in Bali and are advised to check that all business permits and paperwork are in order.

The Task Force is especially focusing on Business Identification Number (NIB) and Regional Taxpayer Identification Number (NPWPD), though if a foreign-owned business is investigated owners can expect to have to produce their visa documents for inspection too. 

The Bali Provincial Government is cracking down on illegally operating accommodation businesses due to a deficit in the hotel and restaurant tax budget of around IDR 3 trillion.

The provincial government is also on a mission to generate more tax revenue through tourism. 

Newly-Built-Luxury-Villa-House-Homes-Next-To-Rice-Field-In-Canggu-Bali

In 2024, Bali will introduce a new tourism tax on all international arrivals to the island. The tax is set to be introduced at IDR 150,000 per person.

Discussions are underway to establish how tourism tax funds will be spent, with many local leaders calling for revenue to be spent on tackling issues such as traffic congestion and waste management. 

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Rika

Sunday 10th of September 2023

Interesting that authorities have only acted due to tax leakage from the hotel industry...

Not because any blind man can see what's happening to / and in Bali.

Two things, leakage is happening because tastes have changed, and many people are no longer interested in staying in big hotels and resorts - cue big hotels entering a dilapidated state as big Bapak in Bali is slow to wake up.

And two, if government big Bapak did his job and collected taxes / enforced laws already in place re. foreign ownership, there wouldn't really be a problem with diminishing taxes.

But government / connected big Bapak has already taken the money and run... hence big big problems developing on many fronts...

When will the Balinese take their island and autonomy back? ...like the people of Thailand did/ had to...

So sad seeing the massive clusterfk that is developing in Bali... seems few people really care besides the money rolling in - from whatever source...

Raplh

Sunday 10th of September 2023

@Rika,

So true. It's always someone else's fault with these people. Indonesia will never be able to halfway run their own country. And the banks in Singapore welcome them with open arms.

J West

Sunday 10th of September 2023

This subject has been covered. It’s obvious that it’s been allowed to flourish. Individual foreigners rent out 10 villas at one price and then advertise the units as rentals at double the rate…. It’s made it very hard to find a place that doesn’t have Russian connection. And the practice has forced prices up dramatically only to benefit the illegal foreigners.

Shorty

Friday 8th of September 2023

What's so difficult? Have a blitz, show us your operating docs. You could cover the Kuta, Legian, Seminyak, Canggu and the Bukit in less than a month. Don't have any or not on site? Bad luck. Close non compliant ones. You don't need to track down the purported owner. Maybe allow a week for guests to find a new place. Don't blame the Russians or anyone else. If government or statutory bodies had been doing their jobs...... This bull**** is an admission of failure and corruption. Remember for every person offering bribe, there's a local accepting it.

Shorty

Monday 11th of September 2023

@Exp, Grow up Expat. It was happening long before the so called 'Russian Invasion' and will continue to happen long after they've gone. If there's demand, there's a market. And it will be exploited. Does it really matter what nationality they are? Bet you pounds to peanuts the Russians are far outnumbered. Also remember the local owner(s) are happily compliant.

George

Saturday 9th of September 2023

@Shorty,

Exactly and to the point.

Exp

Saturday 9th of September 2023

@Shorty, A blanket sweep will not happen as they will likely find a lot of well connected and social high-up Balinese in non-compliance. That will not be tolerated in a hierarchy culture. So again, they will target foreigners and maybe a few low level Javanese.

Exp

Friday 8th of September 2023

Illegal rentals? My villa agent told me that russians would rent expensive long term villas in Sanur area without bothering to negotiate. Makes sense if this is for setting up airbnb or monthly rental business as arbitrage is huge anyway.

BaliDuck

Thursday 7th of September 2023

Deport all Russians or stop talking nonsens.

Wayan Bo

Sunday 10th of September 2023

@BaliDuck, = 🦆🔫❗️

BaliDuck

Saturday 9th of September 2023

@Wayan Bo, Say that face to face.

Oh wait, you need a dentist.

Wayan Bo

Friday 8th of September 2023

@BaliDuck, = reincarnation of AdolfHitler 🤣