On the eve of the August 29, 2007, deadline for formal registration of commercial villas in the Badung Regency of Bali, it appears that hundreds of villas have chosen to brazenly ignore the "grace period" for easy registration and are now bracing to see if official threats to crackdown on errant villa operators will materialize.
According to the Indonesian-language NusaBali, 485 of the estimated total of 711 commercial villas operating in Badung have ignored the Regent's decree (No. 22 of 2007) and made no move to register despite promises by local authorities take a number of stern steps, including formal warnings, closure and even the demolition of illegal villas. The Secretary of the Badung Regency, I Wayan Subawa, told the press on August 22, 2007, that "strong action against unlicensed villas will be undertaken by a judicial team comprised of representatives from a number of government agencies."
A Taxing Situation
An official of the Badung tax office reports that for the period January-May 2007 that only 219 of an estimated 649 commercial villas are paying any taxes. As a result, tax revenues from that sector totaling Rp. 5.6 billion (approximately US$604,500) during the first six months of 2006, stood at only Rp. 1.8 billion (approximately US$193,000) for the period January-May 2007.
The head of the revenue section of the Badung Regency, I Gusti Agung Ngurah Alit Agung, complained that "of the 649 (sic) villas in Badung, only 219 pay any taxes."
Hiding Behind Villa Management Companies
In a separate article in the Indonesian-language Bisnis Bali, an official of the Indonesian Hotel and Restaurant Association (PHRI) who is also a villa operator warned that many villa owners are making the tactical mistake of ignoring warnings to register their properties, claiming that all administrative details relating to their villas are handled by their villa management company.
The official warned that "all individual villas must have permits" allowing them to operate as rented accommodation and that "umbrella permits" for villas operated under a specific villa management company simply do not exist.
The PHRI official supported the promised threatened crackdown on illegal commercial villas and the management companies who manage them.
[Register Your Villa or Else!]
[70% of Bali Villas Illegal]
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