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A Failure of Enforcement

Bali Villa Associations Doubts the Competency of Badung Regency Survey Teams Ability to Crack Down on Illegal Villas

(10/27/2012) That there are a great number of unlicensed and illegal villas operating in Bali’s southernmost regency of Badung hardly classifies as “news.”

Nonetheless, the escalating number of these villas seen as contributing to Bali’s oversupply of accommodation is becoming an increasingly divisive topic within the larger community, prompting those charge with protecting the regency’s finances to promise to survey the illegal villas and move against these business that fail to contribute to the island’s tax revenues.

The renewed promise of governmental action against illegal villas us being greeted enthusiastically by the advisor of the Bali Villa Association (BVA), Ismoyo Soemarlan.

As reported by Radar Bali, Ismoyo has asked the regency’s taxation officials to meet first with the BVA before moving against illegal villas in order that the competency of the review team can be adequately assessed.

“Why do we want to meet first? Because we want to know if the government’s team is qualified or not to do this job. If they are incompetent, then the exercise is a waste of time. There are many illegal villas who know how to trick the officials,” explained Ismoyo.

Ismoyo explained that if the illegal villa sector is properly surveyed and the rules enforced the additional tax revenues for the regency run between Rp. 10 – 25 billion (US$1 -2.6 million). Proper law enforcement measures would also serve to bring into line an estimated 250 illegal villas from an estimated 700 villas operating in the Badung region at the moment.

“The illegal villas contribute to unhealthy price competition. The legal villas who apply the official 21% tax and service charge required under law are automatically more expensive than the illegal villa,” said Ismoyo. “Because of this please arrange a meeting between the government survey team and the BVA.”

In response to Ismoyo’s request, the head of the Badung Revenue Department (Dispenda), I Wayan Adi Arnawa insists his team is ready and has no objection to being given input by BVA. “We appreciate the request of the BVA. A meeting between the survey team and BVA is a good idea. In addition to their input, we will also achieve maximum results,” said Arnawa.

The Badung regency has reportedly paid Rp. 200 million (US$20,800) for a digital software system that will identify and locate all villas in the Badung regency.