Six of Bali’s top leaders have come together and agreed to stop encouraging or granting permits for new hotels and restaurants on productive land starting in 2026.
The landmark agreement comes after plans to ban tourism development were proposed but subsequently scrapped in late 2024.
Speaking to the media on Monday, July 28th, Bali Governor Wayan Koster stated that the six regency leaders who have endorsed this step are from Tabanan, Jembrana, Buleleng, Bangli, Karangasem, and Klungkung.
“These six regencies have agreed to no longer encourage hotel and restaurant development, provided the PHR is distributed more proportionally.”
Notably, the agreement does not yet include Badung Regency, home to resorts like Canggu, Uluwatu, Seminyak, Kuta, Legian, and Nusa Dua, nor Gianyar Regency, which is home to Ubud.
Governor Koster explained that this policy aims to curb land exploitation and maintain balance within tourism development. He explained, “The six regencies will only be developed as tourist destinations, while Sarbagia will become a center for hotel and restaurant businesses.”
Sabargia is in fact a kind of acronym for Denpasar, Badung, Gianyar, and Tabanan, which are the most urban areas of Bali Province.
Governor Koster confirmed that the Bali Provincial Government will ensure the distribution of hotel and restaurant tax revenue will be equitable and fair, regardless of the political background of the regency leader.
He noted, “For example, in Karangasem, even though they belong to different political parties, they will still receive a share. I told the Regent, Don’t worry, my job is to develop Bali equitably and fairly.’”
According to local reports starting in 2026, 10 percent of the total hotel and restaurant tax generated within the Sarbagia area—estimated at around IDR 700 billion—will be allocated directly to the six districts for infrastructure and facilities development. The funds will also be used to repair provincial roads, while the remainder will be distributed to districts through Special Financial Assistance (BKK).
Governor Koster explained, “The BKK amount will be calculated based on the area, population, and level of road damage. This budget may only be used for infrastructure and productive facilities, not for car purchases or other needs.”
By stopping the development of new hotels and restaurants in lesser-visited areas of Bali, there is hope that tourism can remain concentrated in the central south and that tax revenue generated in this area can be used to level up and improve infrastructure for residents all across the island.
During the provincial government meeting on Monday, Governor Koster also confirmed that a reciprocal agreement has been made with the tourism industry regarding the Bali Tourism Tax Levy.
Updates will be announced soon, but changes are expected to come into effect in August 2025, making it easier for tourists to pay their IDR 150,000 fee at hotels, restaurants, and tourist attractions.
The Bali Tourism Tax Levy is a mandatory IDR 150,000 tourism tax that all international tourists must pay prior to their departure from Bali. Governor Koster has offered a 3% service fee for all businesses to sign up to be tax payment portals.
He told reporters, “Hopefully everything can be completed by the end of the month so that it can be implemented in early August.”
He added, “There are already MoUs and cooperation agreements signed with various parties to collaborate on [tourism tax], especially hotels.”
“We don’t want [them to work] for free, so there has to be compensation. How can we get money, but they are told to collect and not get a share?”
“So it seems like our good intentions have to be calculated at a maximum of three percent. But there are lots of offers to collaborate. Hopefully this will be able to increase the realisation of income from the PWA [tourism tax].”
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