Bali has been on a mission to crack down on illegally operating tourism businesses, especially accommodation businesses, on the island. The issue has been a hot topic for Governor Koster in both his first and now his second term in office.
As 2026 gets underway, it is clear that he will not slow down in his efforts to bring accommodation providers in line.
Bali Governor Wayan Koster has issued a summons to Online Travel Agents (OTA) and digital booking platforms that specialise in accommodation to pay their taxes.
According to Governor Koster, there are hundreds, potentially thousands, of private vacation villas and hotels operating illegally by not paying their taxes.
Governor Koster, “There has been a letter from the Minister of Tourism gathering OTA operators, they have been given instructions, and the Bali Provincial Government will also invite these operators, along with the Ministry of Tourism, so that it is integrated.”
He added, “We will organise it so that everyone benefits. Currently, only OTAs benefit, but we don’t. So this is what we need to organise.” Adding “it has to be done gradually, it can’t be done immediately because everyone actually has a role, as long as we create a good system like that.”
According to the Bali Provincial Government, in 2025, nowhere near the amount of tax revenue was generated by accommodation businesses in Bali. While this may not seem like an issue that directly affects tourists, it really does. Bali’s infrastructure is crumbling under the weight of the tourism sector and rapid commercial and urban development. Issues range from failing waste management systems to widespread traffic congestion, both of which are issues that require billions in taxpayer funds to resolve, alongside state funding and independent investment.
He noted that many private villas and other accommodation providers in Bali did not pay Hotel and Restaurant tax (PHR) in 2025, resulting in a massive deficit in the forecasted provincial budget.
Nevertheless, tax income for the Bali Provincial Government did increase in 2025 compared to 2024.
Governor Koster shared, “PHR revenue increased in all districts/cities, meaning the increase in the number of foreign tourists also increases the occupancy rate of official hotels that pay taxes. If, for example, they stay at an unofficial hotel, they don’t pay taxes, but fortunately, this increase shows a positive trend in our tourism achievements.”
For tourists visiting Bali, this is an issue to be aware of, since according to figures from the Bali Provincial Government, there are many hundreds of properties operating illegally in the province. This then raises questions like, if a business is not operating within the law in terms of paying taxes, what other corners are being cut in terms of safety and security?
Tourists traveling to Bali can rest assured, however, hotels, guesthouses, and private villas that are registered members of the Bali Hotel and Restaurant Association (PHRI) must all operate within a strict set of standard operating procedures, both in terms of business management and guest experience.
It is always advisable for tourists to do sufficient research while making accommodation bookings in Bali. It is essential to look at accommodation across a number of booking platforms, social media, and to read real reviews from fellow travellers.
Bali tourists, too, have an obligation to pay their Bali Tourism Tax Levy before departing from the island. The IDR 150,000 tourism tax is a mandatory fee that has been in effect since February 2024.
Payment can be made via their LoveBali app or website, or at the dedicated counter at Bali Airport. Those traveling as part of package tours may find that the Bali Tourism Tax Levy has already been included and organised by their booking agent.
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