The notorious Kuta nightspot Sky Garden Bali has reopened with new management. The reopening took place despite an unpaid tax bill of billions of rupiah owed to the Badung Regency, as reported by Radarbali.com
The Head of the Badung Regency Enforcement Agency (Kasatpol PP Badung), I Gusti Agung Ketut Suryanegara, explained that the Sky Garden Bali held a “pre-opening” event in late January 2023 but has not conducted a “grand reopening” while waiting for a complete set of licenses and permits to be in place.
There is also some confusion and debate among government officials on whether an enterprise of the size of The Sky Garden falls under the legal purview of the Badung Regency Administration or the Bali Provincial Government. As part of The Job Creation Act (UU Cipta Kerja), the government has created new legislation that places the legislative control of medium-sized enterprises on provincial administrations. Small enterprises, meanwhile, are left to supervision on the regency level of government.
Suryanegara, commenting on Saturday, 25 February 2023, regarding the reopening of The Sky Garden Bali, said: “It’s now in the pre-operational stage, not yet the grand opening, while (the business) processes its permits and licenses. If, in the process-completion phase, the company fails to obtain all the needed permits and licenses – and there are time limits, then we (Satpol PP) will issue formal warnings. Although the supervision and issuance of permits remain the purview of the province, those of us working for the Regency only assist on the supervision and monitoring level.
Regarding reports that The Sky Garden has an unpaid tax bill of billions of rupiahs, Suryanegara said it has already been explained and that the “old” company’s tax debt has been declared the responsibility of PT ESC Urban Food Station. This company has formally been declared bankrupt.
“This is a Court decision. The tax debt is the responsibility of the former management. Now Sky Garden has new management and a new rental contract. There are three buildings (used by Sky Garden) with two buildings under contract by the new company,” said Suryanegara.
Commenting separately, the interim head of the Regional Revenues Tax Office (Bapenda), Ni Putu Sukarini, confirmed that the Sky Garden Bali had been summoned and several cases involving the notorious night spot are under review.
“In the meantime, the information I have been given on Sky Garden is that the old company has sold its assets and has paid its outstanding taxes. Earlier, the only ‘owned assets’ were the building, tables, and chairs – insufficient to satisfy tax bills, especially for an owner undergoing prison punishment. Anyway, after studying the case, we have processed matters in keeping with the rules,” explained Sukarini.
Sky Garden has an unpaid tax bill of Rp. 12.5 billion owed to the Badung Regency. While some installment payments have been made on the tax debt, the Regency continues to seek total payment.
Legal and business experts have questioned how The Sky Garden is allowed to operate. “Old” and “New” business entities that mirror each other in name and activities are so rare as to be considered a “novelty.” Business practice traditionally dictates that any party continuing to operate a business accepts the company’s unpaid liabilities, including all obligations to past employees and unpaid taxes.