Phuket considers raising hotel tax to 3%
Phuket is considering raising its hotel tax from 1% to 3%, a move officials say could generate about 1 billion baht a year for local development and tourism promotion.
Authorities in Phuket are considering a proposal to raise the provincial tax on hotels from 1% to 3% of room rates to generate more revenue for local development and tourism promotion.
The proposal was raised on Friday during a workshop on tourism management amid the global energy crisis.
Outgoing Phuket governor Nirat Pongsitthithavorn said the law already allows provinces to collect local development taxes from hotels at rates of up to 3%. He said increasing Phuket’s rate from 1% to 3% would bring the Provincial Administrative Organisation about 1 billion baht a year. If unregistered hotels were also taxed, revenue could rise to 1.5 billion baht, he said.
Mr Nirat said Phuket’s main income comes from the service sector, including hotels, tourism and restaurants, which is also the province’s biggest employer. He said the tax rate should be proportionate to tourism’s role in the local economy.
The Provincial Administrative Organisation already uses some hotel-tax revenue for international roadshows to promote tourism to the island. Mr Nirat said a 3% rate would support more marketing activity aimed at attracting 14 million tourists a year, up from about 11 million last year.
He also said many unregistered hotels avoid paying tax, while legally registered hotels are subject to a local improvement fee of 1% to 3%. The province will have the Revenue Department follow up to ensure taxes are paid, and this could be done without amending any laws, he said.
Mr Nirat and his deputies were ordered transferred earlier this week after what Interior Minister Anutin Charnvirakul said was a feud affecting operations. However, Mr Nirat remains in the post pending official publication of the transfer order in the Royal Gazette.
