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Villas as Villains of Bali's North?

Lack of Tax Revenues and Building Code Violations Bring Villas in Buleleng Regency Under Local Government Scrutiny.

(9/3/2006) During a recent survey of local villas conducted by members of Commission B of the Buleleng Regional Consultative Assembly (DPRD), a number of projects were found to have been built without the mandatory building permit. The same inspection survey, as reported in the Indonesian language Bali Post, also discovered a number of villas and restaurants in violation of the set back rule which require a minimum distance of from 50 to 100 meters from the high water mark.

According to Commission "B" Chairman, Made Agus Yudiarsana, villas that violate the set back rules and do not posses the necessary building permits are seriously damaging the public interest. The local legislator pointed out that Balinese villagers are increasingly unable to gain beach access during religious rites due to illegal villa construction. In some areas, according to Yudiarsana, local fishermen are also prevented from landing their vessels due to the "illegal appropriation" of shore line areas by villa operators.

Citing the matter as fundamental to Bali's culture and image, Yudiarsana called on authorities to take stern action against building code violators and illegally constructed villas.

Little or No Tax Contribution

Meanwhile, Buleleng's local tax authorities are blaming the lack of a contribution from villas in their regency for the continuing shortfall in public funds available to local government. To correct the situation, Buleleng officials are surveying villas operating in the region in preparation for enlarging the local tax base.

Using the Internet

In a new departure by local tax authorities, the Indonesian-language Bisnis Bali reports that Buleleng tax authorities are using the Internet to collect information on the number of villas operating in their region together with their pricing structures.

The Head of the Buleleng revenue office, Nyoman Pastika, told Bisnis Bali that villas are generally failing to make a meaningful contribution to public revenues via taxation while causing tax revenues normally earned from hotels and restaurants to decline.

An Uneven Playing Field

Pastika suggested that the uneven playing field between tax-paying licensed hotels and restaurants in contrast to the unregulated villa industry is causing jealousy on its way to becoming a growing source of social friction in Buleleng.

The man charged with seeking revenue sources for Buleleng, Pastika, blamed the lack of clear regulations governing villa operations for the failure of that sector to make a contribution to local tax coffers. He went on to explain that once area villas have been quantified and recorded, his office will draft regulations on villa operations for local debate.

To date, 50 Buleleng villas have been recorded in the survey. Of that total, a number are rented out on a yearly basis with some being sold to tourists. Bisnis Bali reports that tax authorities are now moving their efforts to the eastern region of Buleleng in an effort to increase annualtourism tax revenues to Rp. 23 billion (approximately US$2.5 million).