Boarding houses — locally known as kost — located in Bali’s Badung regency may soon be required to pay 10 percent in taxes, as part of the district government’s effort to increase regional income amid a rising number of tourists preferring to live in these establishments.

 

“[If we don’t tax them] it will likely impact registered hotels and villas; [some] tourists are now preferring to stay in boarding houses instead and stripping the potential tax collection,” I Made Agus Aryawan, who heads Badung’s one-stop and integrated investment agency, told Tribun-Bali yesterday.

Aryawan said authorities will begin with data collection, basing their move on a 2019 Regent Regulation, locally known as Perbup, which contains guidelines on permits for and management of boarding houses in Badung. 

According to Aryawan, boarding houses have 15 rooms at most, and five rooms at least. All boarding houses, regardless of the number of rooms or other aspects, are subject to the 10 percent tax. 

“It doesn’t matter if it’s a luxury or simple boarding house, they will still be subject to 10 percent tax,” Aryawan said, as quoted by Bali Express. 

He further emphasized that the main aim is to ensure boarding houses in the regency are equipped with license to operate, and are therefore subject to taxation.

Boarding house owners in the area have not yet reacted to the proposal, but it’s likely that tenants would bear at least some of the tax burden.

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