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Hotel and Restaurant Taxes Underpaid in Gianyar

Local Tourism Leader Thinks Hotel and Restaurant Taxes May Be Under-collected by as Much as 95%.

(2/28/2009) The number and range of hotels and restaurants in operation in the Gianyar region of Bali has members has caused the Chairman of the Tri Hita Karana Awards, Berata Ashrama, to tell regional legislators that tax collection falls far below realistic levels.

Quoted in Bali Post, Ashrama considers the number of expensive boutique properties, hotels and local guest houses found in and around Ubud as proof that current tax collection is far below par. Said Ashrama: "What's more, we have hotels that we calculate should be paying Rp. 5 billion (US$446,000) in taxes but are only paying taxes equal to 5% of that amount. There are many cases like this in Gianyar."

He has called on Gianyar officials to undertake a survey of accommodation, occupancy rates, tariffs, shopping, restaurants and spas in operation in Gianyar. In this way, Ashrama feels that officials will get a cleared picture of the "real" tax potential and the amount of underpayment now taking place in that region surrounding Ubud.

The Bali Post article also pointed out that the current Bupati of Gianyar is a hotel owners and well-known tourism leader who should be aware of the potential of the tourism sector to increase much needed regional tax revenues.