Hotel operators' request for an extension of the land tax reduction was dismissed by the finance minister, prompting the Thai Hotels Association (THA) to seek a new solution to ease cash-strapped operators' financial burden.
Marisa Sukosol Nunbhakdi, THA president, said the association met on Monday with Finance Minister Arkhom Termpittayapaisith and was told that extending the 90% reduction on the land and building tax for another year is impractical as the ministry had already sent tax invoices to landlords with a fixed July deadline.
She said because some hotels in certain provinces are permitted to make instalment payments over three months, the THA would like every local authority responsible for tax collection to apply this solution to hotel operators.
"It was clear the land tax could not be delayed or reduced anymore," said Mrs Marisa.
"In our discussions with the ministry we asked for instalment payments over six months and urged a gradual increase of rates, starting with 25%, then 50% and 75%, respectively, from next year to leave breathing room for hotels."
She said the majority of hotels can reopen after most travel restrictions to enter Thailand were eased, but some do not have enough financial stability to pay large tax bills as they prioritise their operational budget for employment to properly serve their guests.
Moreover, hotels in provinces targeting domestic meetings have been severely affected as the budgets for governmental sector meetings and seminars have been cut for the current fiscal year, said Mrs Marisa.
To cushion against this impact, THA said corporate meetings could help support the hotels if those private companies or enterprises received tax deductions for meetings and seminars.
The association also urged the ministry to consider a 200% tax deduction for renovation expenses as maintenance costs were hefty for hotels that closed for two years, especially where mechanical engines such as chilling systems have deteriorated.
The THA also asked the ministry to extend the period of tax loss carryforward from five years to 10 years to help private operators mitigate long-term financial impacts.
Mrs Marisa said hotels acknowledged the government might not continue the fifth phase of the hotel subsidy scheme "We Travel Together", as it currently has a budget for extension of the fourth phase until October.
However, the association urged the ministry to reintroduce a tax deduction on domestic travel expenses, as seen in previous years, to stimulate local tourism in second-tier cities.