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Making Sure Bali’s Villas Pay Their Fair Share of Taxes

Bali Villa Association and Internet Promotion are Helping Bali Tax Officials Track Down Private Homes Operating Illegally as Commercial Villas.


Bali News: Making Sure Bali’s Villas Pay Their Fair Share of Taxes
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(8/30/2010)

Legislators from across the political spectrum are pressuring local government agencies to become more vigilant in tracking down commercially operated villas failing to make a proper contribution to the island's tax revenues.

Quoted in NusaBali, the chairman of the Nurani Marhaen faction, I Made Dharma, said: "We all know that taxes due from villas have not been handled well. Moreover this sector of business has grown rapidly with the appearance of many illegal villas. Recently the government has taken steps to bring this sector into line by collecting data on illegal villas operating without licenses."

Earlier and separately, a member of Commission B of the Badung House of Representatives (DPRD-Badung), I Wayan Puspa, estimated that the annual loss in tax revenues in his regency was as much as Rp. 96 billion (US$10.6 million).

Data from the Bali Villa Association (BVA) states there are 770 commercial villas operating in Badung of which 423 have licenses and 347 are operating illegally.

The head of the Badung Tourism Office, I Made Subawa (Disparda) told the press that his office is taking steps against villas deemed to be unlicensed operations. He, however, placed the number of illegal villas in the Badung regency at only 36 units.

Working together with the BVA, the Badung government is using a number of methods to track down unlicensed villas, including surveying villas posing as private homes and tracing villas promoted via the Internet.

Tax revenues in the Badung regency generated by the villa sector have demonstrated steady growth over recent years. In 2006 Rp. 25 billion (US$2.7 million) in villa taxes was collected, increasing to Rp. 40 billion (US4.4 million) in 2007. In 2008 the villa taxes increased again to Rp. 75 billion (US$8.3 million), increasing further to Rp. 100 billion (US$11.1 million) in 2009. Badung officials are projecting that Rp. 150 billion (US$16.5 million) will be collected from villas in 2010.

Subawa said: "We continue to evaluate, suspicious private homes that are being commercialized. We have coordinated with the BVA, a needed step to determine if a home has been turned into a business. We are also looking at promotion of villas carried on via the Internet."


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