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Villa and Hotel Licensing Targeted for Crackdown?

Bali's Informal Hotel and Villa Sector Increasingly Seen as Causing Substantial Losses in Local Tax Revenues.

(1/15/2006) Members of Commission "A" of Bali's Regional Parliament for Badung made surprise visits on three different tourist accommodation addresses in South Bali on Thursday, January 12, 2006, uncovering further proof that the island's approach to the licensing of accommodation providers remains a jumbled mass of confusion. During the Commission's visit to three accommodation addresses they found two luxurious boutique properties operating with the licenses for a "homestay" or pondok wisata, and another locally owned property running with no licenses or permits at all.

According to the Chairman of the Commission, Nyoman Sukirta, quoted in the Indonesian-language DenPost, one of the properties holding a full set of licenses as a home stay is, in fact, a luxury hotel property with 32 villas on 2.5 hectares of land owned by 6 different owners. The investor in the project justified his project explaining that local zoning laws prohibit the building of a hotel project in his area, "compelling" him to apply for a "homestay license," the true nature of which he further camouflaged by dividing the ownership among six nominee owners.

According to Sukirta, the misuse of the homestay permit for what is clearly a hotel project is causing a substantial loss in tax revenues to the region.

Meanwhile, other members of the Commission participating in the inspection visit called for an urgent review on the procedure on how licenses are issued and taxes collected to prevent further losses to the People of Bali, indicating that their preliminary finding point to malfeasance in the licensing process.