Bali officials have announced their intention to crack down on tourists staying in illegally operated accommodations such as guesthouses, hotels, and homestays.
The decision follows an urgent meeting called by Bali’s Governor Koster to address the issue of tax non-payment. Governor Koster emphasized that authorities would take strict action against accommodation providers who do not comply with the law. This includes establishments that are not registered as formal accommodation businesses or fail to pay taxes on revenue generated from tourism.
Governor Koster highlighted the presence of numerous illegal villas and homestays in Bali, where tourists often stay without the imposition of hotel and restaurant taxes. As a result, local regents and mayors have been instructed to document and report illegal villas and homestays.
For tourists, particularly those who have booked accommodations through online platforms or travel agencies, it may seem unfair to be held accountable for the unlawful actions of the establishments they have chosen. However, it is anticipated that there will be a more formal crackdown on illegally operating accommodations in the coming weeks, potentially involving targeted investigations or raids similar to those carried out by the Tourism Task Force to tackle illegal foreign workers in Bali.
While the majority of holidaymakers in Bali need not be overly concerned, certain groups such as long-stay visitors, digital nomads, or private villa renters should take note of the situation. According to Governor Koster’s Circular Letter Number 4 of 2023, tourists and international visitors are only permitted to stay at accommodations with the proper permits and business licenses. Therefore, those who have informal rental agreements for short or long-term stays with locals who have not registered their properties as accommodation businesses run the risk of being relocated to authorized accommodations by the authorities.
The issue of unregistered accommodations and tax evasion has long been a concern within Bali’s local communities. Many private villas and guesthouses listed on online platforms and social media marketplaces operate without proper registration or lack official permits and licenses to varying degrees. Governor Koster emphasized the need to bring unregistered accommodations and tax evasion under control to preserve the quality of tourism and the revenue it generates.
Data from the Restaurant and Hotel Association of Bali (PHRI) suggests that up to 30% of accommodations in Bali are either unregistered businesses or registered with the PHRI. The Deputy Chairperson of the PHRI for Bali, I Gusti Ngurah Rai Suryawijaya, urged traditional village leaders to collaborate with community members and businesses to ensure compliance with permits and collect data on those without villa and homestay permits.
While this development primarily affects local business owners, tourists and long-stay visitors in Bali should be aware of the situation. It is crucial for all businesses, regardless of size, to meet their legal obligations by paying taxes and operating within the law. Long-stay visitors renting villas, rooms, or homes in Bali are advised to confirm with their landlords that all permits and paperwork are up to date to ensure compliance with the law.
To ensure support for legitimate businesses in Bali, tourists should consider booking accommodations with internationally recognized hotel chains, large-scale resorts and hotels, villas, and guesthouses that clearly display their business credentials on their websites, social media, and other online communication platforms.
