Six of the eight Regencies and one municipality (Denpasar) in Bali have agreed to halt the active promotion of additional hotels and restaurants, starting in 2026. The six regencies have decided to collaborate to avoid promoting the opening of additional restaurants and hotels, understanding that they will share in the disproportionately large amount of Hotel and Restaurant Tax (PHR) collected in the Sarbagia area, which comprises the City of Denpasar and the Regencies of Badung and Gianyar.
Bali Governor Wayan Koster explained on Monday, 28 July 2025, that the six regencies participating in the plan to slow the rapid growth in new restaurants and hotels are Tabanan, Jembrana, Buleleng, Bangli, Karangasem, and Klungkung. “All six of these regencies have agreed to no longer encourage or promote the building of hotels and restaurants in their respective regions, providing PHR tax collections from the Sarbagia Region are proportionally shared among the six regional administrations,” explained Koster.
The Governor stated that changes in development patterns in Bali have created an imbalance in economic development, with hotels and restaurants being constructed primarily in the southern Sarbagia region. At the same time, the tourism destinations visited on holiday visits in the six regencies are joining the development moratorium.
The provincial government of Bali has issued assurances that the division on PHR tax revenues will be done equitably, without reference to the political party and allegiance of each regency, Clarifying further, Governor Koster said: “Take Karangasem Regency for instance, Although the leadership there is (politically) different, they will still get their fair share, I told the Regent there is no need to be concerned, my job is to build and develop Bali in a equitable and even way.”
As reported by NusaBali.com, beginning in 2026, 10% of the total PHR collected in the PHR Sarbagia region is estimated to total around Rp. 700 billion for the year, will be explicitly allocated to upgrade and repair provincial roads, while the remainder will be spent on a special aid fund (BKK).
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“The size of the allocation for the BKK fund will be based on the actual size of the region, the size of the population, and the amount of damaged roadways in the area. These funds can only be used on infrastructure projects, and not for purchasing vehicles and other regional needs,” explained Governor Koster.
The Governor says he is confident that the new scheme will accelerate the rate of infrastructure development and help repair the poor roads, alleviating the traffic congestion that is the focus of so many public complaints. Adding: “Through this cooperative agreement, the financial state of regencies and the municipality of Denpasar will improve, and infrastructure projects will be accelerated.”
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