The deal
Tabanan, Jembrana, Buleleng, Bangli, Karangasem and Klungkung agreed to stop promoting hotel and restaurant construction. Their condition is a fairer split of PHR, the hotel and restaurant tax.
Most PHR is collected in Denpasar, Badung and Gianyar. From 2026, 10% of their PHR, about Rp700 billion, is set to be redistributed.
Where the money goes
Part will fund provincial road repairs and construction. The rest goes to the six regencies as BKK block grants, using a formula based on land area, population and road condition.
The money may be spent only on infrastructure. Buying vehicles and other non-productive spending is ruled out.
The rationale
Governor Wayan Koster says the aim is to reduce pressure on land and spread development more evenly. He stressed the deal does not depend on the regents' party affiliations.
The report describes an agreement between regional heads. It does not cite a specific regulation for the redistribution.
Link to land and development
The six regencies receiving a PHR share cover most of the island. Not promoting new hotels there means less tourism construction in northern, western and eastern Bali.
Badung, Denpasar and Gianyar remain the main tourism regencies. Both hotel pressure and the tax base will stay concentrated there.
Gianyar, meanwhile, hands part of its collected tax to neighbours. That may sharpen its interest in registering every rental property.