Governor Cracking Down on Unlicensed Accommodation

According to reporting from local newswires, including Antara News, The Bali Sun and Top News Media, Bali’s Governor has announced officials will be cracking down on unlicensed and illegally operating villas, guesthouses, B&Bs, hotels, and homestays who provide accommodation for tourists but are not formally registered accommodation businesses or those who are not paying their taxes from revenue generated from tourism.

During his press conference held in Denpasar last week, Governor Koster was clear that the authorities will be coming in hard on accommodation providers who are not adhering to the law as there is an imbalance between hotel taxes and the number of tourists who visit Bali.

Governor Koster said, “There are many illegal villas in Bali, there are even homestays where many tourists stay, and the hotel-restaurant tax is not imposed, which is detrimental. That’s why the regents and mayor have been asked to file records of illegal villas and homestays.”

The Bali Sun report that in the coming weeks, there will be a more formal crackdown on illegally operating hotels, guesthouses, and homestays. This could include targeted investigations or raids similar to those conducted by the Tourism Task Force, which is working to eliminate foreigners working illegally in Bali. 

For the vast majority of holidaymakers coming to Bali, there is little to worry about, but for those longer-staying visitors, digital nomads, or private villa renters, there are a few things to keep in mind, say The Bali Sun.

As outlined in Governor Koster’s Circular Letter Number 4 of 2023, tourists and international visitors in Bali are only permitted to stay at accommodations that possesses the correct permits and business license.

This means that anyone who is in an informal short or long-stay villa rental agreement with a local person or family who has not formally registered their property as an accommodation business potentially risks being moved onto formal accommodation by the authorities. 

It has been a longstanding issue within local communities in Bali that many private villas and local guesthouses listed on online booking platforms and social media marketplaces are not formally registered businesses or lack official permits and licenses to one degree or another, report The Bali Sun.

Governor Koster said that unregistered accommodation and tax evasion in the accommodation sector must be bought under control.

According to data from Bali’s Restaurant and Hotel Association (PHRI), as much as 30-percent of all accommodations in Bali are not legally registered business entities or are registered with the PHRI.

The Deputy Chairperson of the PHRI for Bali, I Gusti Ngurah Rai Suryawijaya, told reporters, “Illegal villas have been happening since 2015 because tourism has been directionless for too long, so now we have to [enforce the law]. Things [must be put] in order first, give businesses an opportunity to take care of permits.”

Suryawijaya called on traditional village leaders to work with community members and businesses in their jurisdictions to ensure that paperwork is in order and collect data on those who are yet to acquire villa and homestay permits. 

Top News Media are reporting that PHRI Bali has stated that currently the amount of data on villa licensing and homestays tends to vary from agency to agency, so with the support of the Governor of Bali, it is hoped that traditional villages will also assist in the data collection process. “Therefore, in a traditional village, all the inns should be synchronized so that no inch of land is missed, so village heads are involved in data collection,” Suryawijaya added.

Fundamentally, this news impacts local business owners, say The Bali Sunbut it is something that tourists and long-stay visitors in Bali must be aware of. No matter how small of a business, local residents are legally required to pay taxes and operate within the law.

To be on the safe side, long-stay visitors renting villas, rooms, or homes in Bali should check in with the landlords to ensure that permits and paperwork are up to date to help keep everyone safe in the eyes of the law.

For tourists coming to Bali, booking accommodation with internationally recognized hotel chains, large-scale resorts and hotels, villas, and guesthouses that display their business credentials clearly on their websites, social media, and online communication is the best way to ensure you’re supporting legitimate businesses in Bali. 

Source: Antara News, The Bali Sun, Top News Media

Image: Bali Governor Wayan Koster/ DOK Via ANTARA

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