Bali Tourism Tax Levy Yields Disappointing Compliance Rates One Year On

As Bali marks nearly a year since the introduction of its Tourism Tax Levy policy, new data reveals a concerning trend: fewer tourists are contributing to this initiative than initially anticipated. Recent figures indicate that only 35% of international visitors are paying the mandated IDR 150,000 (approximately $10) tax, a drop from previous estimates suggesting compliance was at 40%.

Record Visitor Numbers Overshadowed by Low Compliance

Tjokorda Bagus Pemayun, Head of the Bali Provincial Tourism Office, shared insights into the latest data in a media briefing. In 2024, Bali welcomed 6.4 million international tourists, surpassing the provincial target of 6 million. If all visitors had fulfilled their tax obligation, the provincial government could have amassed IDR 960 billion. However, actual revenue collection stands at a disappointing IDR 317 billion, suggesting significant gaps in compliance.

Pemayun highlighted that over 90% of the tourists who did pay the tax made their contributions prior to their arrival in Bali. “Some foreign tourists pay before departure, but at the airport, there is no inspection related to the tourism tax,” he stated. This lack of oversight contributes to the situation where many tourists evade the tax requirement.

Calls for Increased Collaboration Across the Industry

Amid these challenges, Pemayun emphasizes the need for enhanced collaboration within the tourism sector to incentivize tax payments and streamline the process for tourists. Currently, collaboration exists with payment gateways such as BCA and BPD, but Pemayun advocates for diversifying these channels. He pointed out the potential for integrating services like Doku, which includes the widely-used WeChat platform in China.

The Bali Tourism Tax Levy, launched on February 14, 2024, was designed to provide vital funds for environmental preservation, cultural protection, and infrastructure improvements in the region. Despite these intentions, transparency regarding the allocation of collected funds remains an issue, leaving the public uncertain about how their contributions are being utilized.

Current Enforcement Measures and Future Sanctions

Although the Tourism Tax Levy is clearly stipulated as a mandatory payment, enforcement poses a challenge. Without substantial legal repercussions in place for non-compliance, authorities are struggling to ensure widespread adherence to the tax requirement. Currently, tourists pay the tax via the Love Bali website or app, where they enter personal and payment details to obtain a QR code voucher. Each traveler, including children and infants, must process separate payments.

In response to the low compliance rates, Bali’s Acting Governor, Sang Made Mahendra Jaya, has indicated that measures to enforce penalties for tax evasion will be explored. He noted, “If there are no sanctions, we can’t do anything if they don’t pay. In the future, there will be sanctions with a minimum penalty of ten times the tourism tax fee or a week of imprisonment; they must pay.”

Pemayun supports the implementation of these penalties, underscoring the need for a stricter approach to ensure fair contribution from all international visitors.

Conclusion

As Bali strives to uphold its natural beauty and cultural heritage amidst a booming tourism industry, the current compliance rates for the Tourism Tax Levy reflect a critical area for improvement. The provincial government is under increasing pressure to enhance enforcement mechanisms and transparency regarding the use of tax revenues to ensure that Bali continues to thrive as a world-class destination. As such, both tourists and local authorities will have to navigate the complexities of compliance and enforcement in the months ahead.