Hotels cough up B44m in rooms tax

PHUKET: With three weeks to go until the end of the tax year, Phuket’s hotels have paid more than 44 million baht in tax on room revenue to the Phuket Provincial Administration Organization (OrBorJor), President Anchalee Vanich-Thepabutr announced today.

K. Anchalee said that 217 of the island’s hotels – considerably less than half – had paid.

The OrBorJor would be writing to the hotels which have paid to thank them for their co-operation, said K. Anchalee. But she warned those who have yet to pay that the OrBorJor will not let the matter slide.

“First I will send notices to the hotels who [do not pay],” she said. “If these notices are ignored, I will use the law to force them to pay.”

Owners or managers of hotels that fail to pay the tax – 1% of the income from rooms – face fines of up to 5,000 baht or three months in prison, or both.

However, K. Anchalee told the Gazette today that, after talks, local members of the Thai Hotels Association (THA) had agreed to pay, but first wanted to see the OrBorJor‘s plans for spending the money.

“I will send the budget plan to the THA and I believe that they will have no problem with it,” she said.

K. Anchalee said the revenue would be used to promote Phuket as a “World Class” tourism destination, and to improve facilities for tourists.

Some will be spent on hiring lifeguards to watch every beach on Phuket. Other proposals include improvements to the scenery around Khao Pra Taew wildlife sanctuary and at Kok Chana Pama in Thalang district, site of the 1785 victory over Burmese forces by an army led by the Two Heroines.

In addition, said K. Anchalee, the OrBorJor intends to take a roadshow to countries such as Russia and India to promote tourism to Phuket.

“I guarantee that the income from the hotel tax will be put to good use, will be spent efficiently and will reap dividends for Phuket in the near future,” she said.

When first introduced in 2000, then at a rate of 0.5%, the OrBorJor tax was bitterly opposed by Phuket’s hotels.

One major bone of contention was that the OrBorJor at that time was planning to collect the tax first and then decide what to do with the money, rather than draw up a budget first, and base the tax rate on its budgetary requirements.

Hotels were also furious that they would not be able to pass the first year’s tax on to guests, because most hotels had already signed one-year room-rate contracts with major tour operators.

The tax is levied on room revenue only, and not on hotels’ other sources of income. In addition to the hotel room tax, the OrBorJor raises funds through taxes on tobacco and fuel.