T

he imposition of tax on groundwater use has forced businesses to consider closing off their artesian wells.

In June this year, Bali Governor Made Mangku Pastika issued a decree stipulating 10 and 15 percent tax rate increases for users of groundwater.

I Gede Ngurah Alit Sudibya, head of the Denpasar Environmental Management Agency, said at least 12 property owners, including hotel and supermarket operators, had said they would stop using groundwater for their daily use.

"Many of the users say they can no longer afford to pay the tax for the groundwater use," Sudibya said.

Currently, 1,062 users - including offices, supermarkets, medical clinics, hotels and other businesses - are registered with the agency to draw groundwater for daily use.

City-owned tap water company PDAM cannot distribute adequate water supplies to meet the demand from middle- to large-scale businesses.

Denpasar's monthly water need is more than 3 million cubic meters, while the PDAM can only supply 2.3 million cubic meters to its 66,189 customers.

Wayan Nesa Arsana, from the Dr. Hendriks Medical Clinic in Denpasar, complained the clinic had to pay Rp 3 million a month after the groundwater tax increase, up from only Rp 300,000 a month prior to the hike.

"The tax increase will definitely affect our cash flow to finance our daily operations," Arsana said, adding the clinic would now probably subscribe to the PDAM.

Previously, Panudiana Kuhn, chairman of the Bali branch of the Indonesian Employers Association, said the association had filed a complaint against the tax increase with the Bali Legislative Council.

"Most association members operate hotels and other tourism-related businesses that require abundant but appropriate use of groundwater," he said.

For four- to five-star hotels, the rate increase means they are now paying Rp 27,000 a cubic meter, up from only Rp 1,500 previously, for the first 50 cubic meters.

Medicine and cosmetics producers pay Rp 75,000 a cubic meter.

Hospitals, which along with charities were exempt from paying the groundwater tax, now have to pay.

"Anyone can register with the PDAM to get tap water, but in reality, the water company just can't provide enough water to all subscribers, especially middle- and large-scale enterprises," Kuhn said.

Bali Tourism Board chairman I.B. Ngurah Wijaya urged the governor to review the new decree.

"The tax rate increase is too high, it's going to be a burden on the hospitality industry," he said.

Bali Environmental Agency official Ni Gusti Oka Gayatri lamented the PDAM's lack of capacity.

"Ideally, groundwater use must be limited to conserve water and protect the environment," she said.

Only 250 of 1,026 groundwater users use meters to measure their use of groundwater.