Hotels urge government to reconsider collection of land tax as they fight to survive

The Thai Hotels Association is petitioning the government to reconsider collecting the full rate of land and building tax this year. THA president Marisa Sukosol Nunbhakdi says imposing the levy will have a serious impact on businesses fighting for survival.

“The government should carefully look at the context, as hotel revenue remains much lower than the value of properties, especially for those in prime locations. Tax calculation based on land appraisal is not reasonable in this environment because some properties remain closed. If the government doesn’t continue measures such as the tax cuts issued in 2020-21, more hotel workers might lose their jobs as employers choose to cut expenses on payroll instead.”

According to a Bangkok Post report, the THA says international arrivals plummeted by nearly 93% last year, while domestic tourist numbers dropped by 68%. Things have not improved this year and have been further exacerbated by Russia’s war on Ukraine and the extra costs associated with Covid-19 healthcare measures.

“Those suffering the most are small and medium-sized hotels. Some hotel owners came to us for help because they don’t have enough cash flow to pay for a tax bill of around 90,000 baht. This sum is quite a burden for small businesses that have already suffered for 2 years.”

In the south, Pongsakorn Ketprapakorn from the Tourism Council of Phang Nga says 17 tourism associations in the region have also written to the government about the land tax.

“Our income doesn’t match land price appraisals, which continue to rise progressively every year. The tax burden might trigger some owners to sell their properties to investors from Hong Kong, Singapore, and Canada who are looking for long-term investment and have cash to spend.”

Another concern is phase 4 of the “We Travel Together” domestic tourism stimulus campaign ending in May. Pongsakorn says if the government doesn’t extend it, tourism operators in the region will have to come up with their own solution.

“If the government decides not to introduce a fifth phase of ‘We Travel Together’, we will run a provincial promotional campaign called ‘We Travel By Ourselves’, with the service sector in Phang Nga offering 20-40% discounts, similar to the government subsidy of 40%, in an attempt to stay alive.”

SOURCE: Bangkok Post