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Illegal Levies Sought at Bali's Tourism Office

Badung Tourism Chief Vehemently Denies Local Press Reports of Illegal Payments From Hotels, Restaurants and Bars Seeking Operating Licenses in Bali.

(11/30/2009) NusaBali has broken a story indicating large-scale unofficial payments being made to the Badung Tourist Office (Dispar Badung) in connection with the issuance of licenses for hotels, restaurants and bars in the regency.

The report says that the payment of the special fees or donations are being given in return for promises that applications for operating licenses would be speedily processed and approved.

Quoting an unnamed local hotel owner who claims an "insider" at the tourism office accepts a fixed-price-donation of Rp. 100 thousand (US$10) for every chair at a restaurant or bar and Rp. 1 million (US$100) for every room of a hotel.

The same source said the unofficial payment is made at the time of application for the required licenses issued by Dispar Badung. The source said: "to convince the contributor, the amount paid is written into a ledger. But, in reality, the money does not go into any official government account."

The hotelier said the unofficial payments have been a fact of life since he was involved in arranging permits and are charged starting from the village level (keluruhan) up until the district level (kecamatan).

The local hotelier's allegations were confirmed separately by another unnamed source said by the paper to be employed on the staff of the Tourism Service.

NusaBali said the distribution of the illegal fees among certain officials within the tourism service had become a source of irritation among workers at the government office. Lower level staff at the Tourism Office are said to be complaining that they get no share of the spoils. Quoting one tourism staffer, "the distribution is not fair, only those at the top are getting a share while staff at the Disparda who are not getting enough and are beginning to open their mouths."

The allegations of illegal payments has been directly denied by the head of the Tourism Office for Badung, I Made Subawa. He insists that the reports are not true and is certain that none of his subordinates are guilty of charging illegal levies. "All licensing procedures are in accordance with rules in place, it is impossible that there are any illegal fees," Subawa proclaimed.

Subawa went on to say that hotel licensing is based on Provincial Law No. 14 of 1996 which contains no stipulation for a Rp. 1 million fee per room being alleged by various sources. At the same time, Subawa admitted that Provincial Law No. 16 (paragraph 18) of 1996 does provide a licensing fee of Rp. 10,000 (US$1) per chair for bars. "But it is not correct to say we take a fee of Rp. 100 thousand per chair," he added.

Subawa went on to explain that through the month of November the tourism office of Badung has failed to achieve its target for registration fees from bars. "Until now, from an annual target of Rp. 6 million (US$600), less than half that amount has been paid to Dispar," he explained.

In countering the reports of illegal fees, Subawa said the guilty parties were most probably middlemen, fixers and brokers offering to organize licenses and permits. These individuals will invariably list a "service fee (uang jasa)" in their charges. Subawa said it is impossible to avoid such practices among "fixers" involved in the licensing process.