Leaders in Bali are in the midst of a crackdown on illegal tourism accommodation on the island.
According to local tourism stakeholders and politicians, there is a rising number of private vacation villas in Bali operating outside the law. This includes operating unregistered businesses and foreigners on the island illegally subletting properties and working on the island while on tourism visas.
The Regent of Badung, Wayan Adi Arnawa, and the Deputy Regent of Badung, Bagus Alit Sucipta, have conducted a series of spot checks on suspected illegally operating tourism villas on the island.
On Monday, May 5th, the Regents and their team visited a private vacation villa on Jalan Taman Sari in the North Kuta area.
The spot checks and site visits have been carried out as the latest travel data from the Bali Provincial Government shows that tourism arrival figures are increasing, but hotel occupancy is decreasing.
Regent Arnawa and his teams are working on the hypothesis that this is because an increasing number of private villas and guesthouses are being built on land that is registered as residential land and owned by local people but is leased out to foreign nationals or that the private villas are rented to tourists or foreigners on long-stay socio-cultural visas in Bali.
Regent Arnawa told reporters, “We first ensure whether accommodation like this is included in the target tax object, in this case, the Regional Taxpayer Identification Number (NPWPD) or not. However, in reality, from several places we visited, some had paid and some had not registered as NPWPD.”
Though Regent Arnawa and his teams are concerned that the number of illegally operating accommodation businesses in the region is rising and that hotel occupancy rates are in a small decline, accommodation is still the biggest contributor to Bali’s Regional gross Domestic Product.
The Central Statistics Agency (BPS) of Bali has confirmed that during the first quarter of 2025, accommodation, followed by food and beverage businesses, contributed the most tax to the provincial budget.
In a statement, the head of the Agus Gede, Hendrayana Hermawan, said, “Accommodation and eating and drinking, when we talk, create the biggest added value because the portion of tourist spending is also the largest for accommodation and food.”
Hermawan confirmed that accommodation businesses in the Badung Regency area, followed by Denpasar City, were the highest contributors to tax revenue through the hotel and restaurant taxes added “The contribution of the service sector is still quite dominant and the most dominant service sector is accommodation and food, this is also in line with the development of tourism which is indeed the driving force of the Bali economy.”
He shared, “If we look at the numbers, Bali’s economic performance accelerates faster than the national, maybe the driver is also a little different, if the national industry or processing, while we are the driving force of tourism.”
In a practical sense, tourists booking upcoming trips to Bali need to be aware that that they are legally obliged to stay in formally registered, and legally operating accommodation. This is stipulated in the “Circular Letter (SE) No. 07 of 2025 concerning New Regulations for Foreign Tourists During Their Stay in Bali”.
As tourist trends see increasing demand for stays in private villas in Bali, savvy tourists are looking to hotels to provide incredible facilities, all-inclusive options, exceptional service, and unmissable deals. As demand for private villas rises and hotel occupancy rates start to decline, savvy tourists will be able to find fantastic hotel deals as resorts seek to fill rooms and keep their businesses growing.
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J West
Sunday 11th of May 2025
Inevitably, the shoddy construction of these chicken coop "villas" will result in the deaths of one or many tourists. Whether it's an unsafe roof falling inward during monsoon or an electrical line submerged in the "plunge pool", the fact remains that construction standards are rock bottom in Bali and tragedy will occur ...
It happens in the western countries even when inspectors are present and accountable....so who is prepared to accept the legal liability? Any OTA reading the had better consult their legal advisor if they have had any responsibility in the booking management of these seat traps.
J West
Wednesday 14th of May 2025
@M, Just for the exercise I'm going to imagine a smart Australian lawyer suing a globally located OTA or other provider if they have sold a package of fares and rentals to an innocent buyer without ensuring the licensed legal safety of an end user. "You can run...but you can not hide". Ex: an insurance company might refuse your claim while in Bali or other holiday destination, but you'd sue them in the country issued'. OTA's etc, should get caught up on this.
Shorty
Tuesday 13th of May 2025
@Exp,
If you are building your own villa you should ensure the specs meet the necessary standards. OK you may know bugger all, but there are independant surveyors. Buying prebuilt is the same.
In Australia and many countries you'd want inspection reports, geotec, surveys, title searches...before you'd buy. Most lending authorities won't give you the money without them.
It's ironic, many people put more thought, effort and analysis in to what car to buy.
M
Tuesday 13th of May 2025
@J West, why who takes the legal responsibility in case of a car accident if no mandatory road insurance? who takes responsibility if a worker has an accident at the workplace, if there's nothing such as a mandatory health insurance?
If you live in Indonesia you already know the answer. I just always hear the same excuse...
J West
Monday 12th of May 2025
@Exp, You're right about that. My question stands...who takes on the legal responsibility? There has to be consequences. I think an active OTA like Agoda (for ex) should demand to see proof of compliance ( in the form of licences) before booking in unsuspecting tourists.
Exp
Sunday 11th of May 2025
@J West, I have seen brand new villas having installed grounding type power sockets everywhere. Unsuspecting villa owners and tenants would think that is comforting while actually most outlets lack ground wire inside even in the wet areas. As usual you get what you inspect, particularly so in Indonesia.
Jimmy
Saturday 10th of May 2025
Nobody is taking these clowns seriously. Tourists have to research a villas tax and registration status. LOL!
Shorty
Friday 9th of May 2025
An interesting question.
Assume you own a villa which is built legally but not registered as tourist accomodation. Periodically it's vacant. You don't advertise and let friends or whoever use it either for free or paid back in the home country. If asked, it's free and we're friends.
They pay the staff direct for the time they're here including power, gas.... No meals included they organise and pay with the staff.
Thoughts?
Shorty
Monday 12th of May 2025
@Mr Sun,
A common way villas are rented.
Steve bm
Monday 12th of May 2025
@Shorty, oh you mean all the dodgy stuff that's been happening for decades mates of mates nudge nudge wink wink
Shorty
Monday 12th of May 2025
@Mr Sun,
A relatively common practice.
Mr Sun
Saturday 10th of May 2025
@Shorty, what are you blabbering about?
Peter
Friday 9th of May 2025
And how would a tourist know weather a villa was registered or not
Helen
Saturday 10th of May 2025
@Peter, I agree! How?!?!?
Exp
Friday 9th of May 2025
@Peter, Exactly. This requirement for tourists to "Stay in legitimate accommodations, whether a guesthouse, hotel, or villa" is obviously impossible to manage for foreign tourists, many new to Bali.
In any other country the gov. would attempt do their job and ensure all accommodation meet local laws and regulations. But the Balinese are different as they cannot do any wrong.
But the real reason is that many local owned villas do not bother with paperwork or pay taxes, hence the locals will at all cost avoid making a system that actually identify ALL villas missing paperwork. No different from only stopping foreign motorbike riders not wearing a helmet.
Exp
Friday 9th of May 2025
The article states that the Regent raised concerns:
1. "Increasing number of private villas and guesthouses are being built on land that is registered as residential land and owned by local people but is leased out to foreign nationals."
With the right visa/residential permit that is legal?
2. "Private villas are rented to tourists or foreigners on long-stay socio-cultural visas in Bali."
Nothing wrong with that?
And it is the villa owners to pay the tax to gov. not those renting.
Looks like this effort will be gone by the wind as well.