The Badung regency administration says that it is reprimanding owners and developers constructing villas without building permits and operation licenses.
I Made Subawa, head of the Badung tourist office, said that the administration would take stern action against violators of the regulation.
"Many owners and developers of villas are very stubborn. They insist on building and operating their villas without the necessary licenses," Subawa said.
The administration said it had halted construction of a villa owned by a foreigner in Seminyak.
"Nationality is irrelevant. Both local and foreign owners have to abide by our existing regulations," he said.
Subawa said some of the villa owners had tried to "play" with the officials.
"They quietly operated their villas although they did not have the operational permits. This is illicit and will not be tolerated anymore," he said.
Badung Regent A. Gde Agung had previously reprimanded owners and operators of "illegal" villas.
"I will not hesitate to stop and take very stern action against these *naughty' operators and owners," he warned.
The regent recently demolished a number of telecommunication towers constructed without required permits.
Despite legal disputes, the regent has insisted on regulating the construction of such towers.
"The construction and operation of *illegal' villas have caused a significant amount of financial losses for the regency from taxation and permits," Gde Agung said.
The rapid growth of "illegal villas" in Badung regency and other areas in Bali has sparked strong protests from owners of hotels and restaurants on the island.
Tjokorda Oka Artha Ardana Sukawati, head of the Indonesian Association of Hotels and Restaurants in Bali has frequently called on the provincial and regional administration to be on guard against unregistered tourist-related facilities on the island.
"We can set up close cooperation with the government to monitor the development of such tourist accommodations and to continue to monitor their standards of services and building facilities."
Ismoyo Soemarlan, the head of the Bali Villa Association, said that legal villas in Badung regency had contributed around Rp 75 billion in tax revenues in 2009.
The association said there were only 711 registered villas in Badung with around 7,000 rooms.
"The revenue would be bigger if all villas were registered with the association," said Soemarlan, the general manager of Uma Sapna Villas.
Badung's revenues from hotels and restaurants' taxes grew 13.1 percent from Rp 601.8 billion in 2008 to Rp 680.8 billion in 2009.
The regency has targeted to gather Rp 736 billion in tax revenue from the industry this year.
