Regulation Watch · Tax Compliance · Bali Province. The regulation guides every Bali regency and city government in determining Nilai Perolehan Air Tanah (NPA) as the tax base for Pajak Air Tanah. It is relevant to commercial and institutional groundwater users throughout Bali, while the tax rate, assessment and collection remain matters for the applicable regency or city framework.
Bali Sets a Progressive Groundwater Tax Base
Bali Governor Regulation 8/2026 standardises the groundwater acquisition value used as the provincial tax base, combining a Rp2,175/m3 raw-water price with resource, business-use and progressive monthly-volume factors.
- Published
- Established and promulgated on 23 April 2026 in Bali Provincial Gazette 2026 No. 8. The official Bali Province JDIH lists the regulation as in force. It was first recorded by Regulation Watch on 9 October 2026 as a late-discovered instrument.
- Effective
- 23 April 2026, the date of promulgation.
- Added to Watch
- 9 October 2026
Who is affected
PT PMA and PT PMDN companies, foreign and Indonesian shareholders and directors, hotels, villas, restaurants, wellness facilities, factories, clinics, developers and construction sites, commercial property owners, landlords and tenants, water-product businesses, social and public institutions, and other persons or entities extracting or using groundwater in Bali.
Practical impact
The province-wide NPA formula is NPA = HAB x BAT. HAB is fixed at Rp2,175 per cubic metre, comprising Rp1,075/m3 for groundwater production cost and Rp1,100/m3 for treatment cost. BAT then weights the natural-resource component at 60% and the use component at 40%. The use component rises across five user groups and five monthly extraction bands, so the assessed tax base can increase materially with business type, OSS risk classification and volume. Water quality and the availability of piped or surface-water alternatives also affect the resource factor. The regulation changes the tax base, not the local tax rate or a filing deadline, and payment of tax does not cure a missing groundwater permit or approval.
Bali Governor Regulation 8/2026 was established, promulgated and made effective on 23 April 2026. It provides the province-wide method that Bali's regency and city governments use to calculate Nilai Perolehan Air Tanah, the acquisition value that forms the tax base for groundwater tax. The official Bali Province JDIH lists the instrument as in force in Provincial Gazette 2026 No. 8.
The core formula is NPA = HAB x BAT. Harga Air Baku, or HAB, is fixed at Rp2,175 per cubic metre: Rp1,075/m3 for the cost of producing groundwater plus Rp1,100/m3 for treatment. Bobot Air Tanah, or BAT, is then calculated from a 60% natural-resource component and a 40% use component. This is an acquisition-value formula, not the local tax rate itself.
The natural-resource component ranks a source by water quality and the presence of an alternative supply. Good-quality groundwater with an alternative source receives the highest weight, followed by good-quality water without an alternative, poor-quality water with an alternative and poor-quality water without an alternative. An alternative includes a piped-water network or surface water, making factual evidence of availability and quality important to an assessment.
The use component groups users by what the water supports. Group 1 covers businesses whose product is water. Groups 2, 3 and 4 cover non-water products or operations classified as high-, medium- and low-risk respectively. Group 5 covers specified social, education, health and government activities, direct geothermal use and public village or state water systems. Each group then uses progressively higher factors across monthly extraction bands of 0-50, above 50-500, above 500-1,000, above 1,000-2,500 and above 2,500 cubic metres.
For businesses, the result is a direct connection between the tax base and the facts recorded in OSS, the purpose of the water, meter data and local source conditions. A hotel, villa, restaurant, clinic, factory, development site or water-product business should therefore be able to support its user group, risk level, monthly volume, water quality and availability of alternatives before accepting or challenging a regency or city assessment.
The regulation does not create a new tax-payment date, replace local tax rates or legalise a well. Local governments continue to apply their own tax administration and rate rules to the NPA, while groundwater permits and approvals remain a separate compliance track. Property owners, tenants and operators should align the assessment with their contracts but verify who local law treats as the taxpayer.
Article 14 requires the Governor to review NPA at least once every three years or when fundamental economic conditions change, with revised values set by Governor Decision. Businesses should therefore retain the calculation inputs and monitor later official Bali JDIH instruments rather than treating the Rp2,175/m3 HAB or factor set as permanently fixed.
Late discovery: the regulation took effect in April 2026 but was not previously recorded in the Regulation Watch ledger. The official Bali Province JDIH record and signed text now provide the primary-source basis for publishing the formula and its practical compliance consequences without changing the instrument's true legal dates.
Required action
- Inventory every well and groundwater source, its location, current groundwater permit or approval, NIB and KBLI, meter, monthly extraction records, local tax registration and assessment notices; reconcile the legal operator with the property owner and actual user.
- Classify each use into the regulation's five groups: water as the product; support for a high-, medium- or low-risk business; or the specified social, education, health, government, geothermal and public water uses. Keep the OSS risk classification and actual use consistent with the selected group.
- Map monthly metered extraction to the progressive bands of 0-50, above 50-500, above 500-1,000, above 1,000-2,500 and above 2,500 cubic metres, and investigate estimated, missing or inconsistent meter data before it reaches a local assessment.
- Document groundwater quality and whether a piped-water network or surface-water source is genuinely available, because those facts determine the natural-resource weight used in BAT.
- Compare every regency or city NPA assessment issued for periods from 23 April 2026 with the Rp2,175/m3 HAB and the applicable resource, use-group and volume factors. Promptly seek correction from the competent local revenue authority where the source, group, risk level, volume or arithmetic is wrong.
- Budget for the progressive tax-base effect, and allocate metering, reporting and tax-payment duties clearly in leases, management agreements and owner-operator arrangements without assuming that a contractual allocation changes the taxpayer recognised by local law.
- Keep groundwater licensing remediation separate from tax compliance. A paid assessment or registered tax object is not evidence that extraction is licensed, and an unlicensed or inconsistent well should be addressed under the current groundwater and OSS approval route.