Hoteliers want 90% tax cut extended

Hoteliers want 90% tax cut extended

A staff member cleans the pool at a Bangkok hotel. The hotel industry is facing a slowdown because of the temporary suspension of the Test & Go scheme. AFP
A staff member cleans the pool at a Bangkok hotel. The hotel industry is facing a slowdown because of the temporary suspension of the Test & Go scheme. AFP

Hoteliers are urging the government to extend the 90% reduction of the land and buildings tax for another two years or collect a new levy of 20-30% instead as the tourism industry is far from recovering.

"The new tax rates, which affect hotel owners the most, have to be put off until tourism sees an improvement because the number of tourists hasn't significantly increased due to the flip-flop on reopening," said Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association (THA).

To cushion the impact of the pandemic in June 2020 the cabinet offered a cut of 90% on the land and buildings tax.

Mrs Marisa said hotel operators have lost 80-90% of revenue from 2019 levels, especially hotels at major tourism destinations, because of a supply-demand imbalance.

Moreover, the industry now faces a slowdown because of the temporary suspension of the "Test & Go" scheme, while the domestic market is waiting for the fourth phase of "We Travel Together", a hotel subsidy campaign, she said.

Their financial woes mean hoteliers are not prepared to pay the full rate of the tax this year or next year, said Mrs Marisa.

She said hotels in prime locations in the capital have to pay a higher tax because the tax calculation is based on location, but their weak revenue does not match the appraisal, which is quite high.

The government should consider reducing the tax collection to 70-80% to maintain revenue for local development, or extend the 90% reduction for another two years to alleviate the private sector's burden, said Mrs Marisa.

Udom Srimahachota, vice-president of the THA's western chapter, said if the new rates are imposed, hotels may have to seek more loans to cover the cost.

Mr Udom, also executive director of Baan Talay Dao Resort in Hua Hin, said the resort has to pay 700,000 baht per year in tax, or about 1-2% of overall operating costs.

In an ailing economy this is a huge burden, even though payment can be divided into three-month instalments, he said.

Hoteliers would also like the Labour Ministry to continue the 3,000-baht subsidy for monthly salaries of employees at small companies that employ no more than 200 workers. Mr Udom said the scheme, which ends this month, should be extended for six months as hoteliers want to maintain staff amid a surge in operating costs.

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