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The Coming Crackdown on Villas in Bali?

Chairman of BTB estimates US$1.875 M in Tax Revenue are Lost Every Month.

(2/20/2006) Bali's continuing slump in visitors is causing various sectors of the community to take a closer, harder look at Bali's villa industry.

The Badung Regency Tourism Office estimates that there are some 5,000 commercial villa rooms now in operation in Bali spread across some 500 villas. While most of these villas were built under the pretext of private residences, many are, in fact, now being operated as rental units without possessing the required environmental and building permits or business licenses required of commercial accommodation providers. A recent survey conducted by Bali's Udayana University, in fact, suggested that as much as 22% of the people now visiting Bali are using villa-style accommodation.

The Chairman of the Bali Tourism Board (BTB), Bagus Sudibya, has estimated that, based on current estimates, the government of Bali may be losing as much as US$ 1.875 million in Hotel & Restaurant taxes every month due to illegal commercial villa operations.

Sudibya's discontent, mirrors the frustration of many Balinese hoteliers who are suffering a prolonged drought of visitors. Many hoteliers complain that the Government must institute a crackdown on villas operating illegally, claiming that they are losing guests to the unfair competition of villa operators who are unfettered by licensing, environmental controls, minimum wage requirements, payroll taxes and other social costs and controls imposed on legally registered accommodation businesses.

Sudibya, quoted in the Indonesian language BisnisBali, called on prosecutors, Bali tourism officials, the police and tax officers to quickly move against villas operating illegally as commercial enterprises. The Chairman of the BTB said that it's impossible for villas to hide their commercial activities in Bali and that a coordinated response could see illegal villas brought into commercial compliance or closed within three month's time.

Local press reports indicate that local officials are in the process of accumulating data on villas operating across Bali in preparation for a coming enforcement drive.

 

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