PHUKET, THAILAND – Phuket’s governor has approved a significant increase in the hotel tax, aiming to collect substantial funds for island development.
Phuket’s governor, Nirat Pongsitthithavorn, has greenlit a substantial increase in the hotel tax, which is set to triple from the current 1 percent to 3 percent. This move is intended to generate much-needed millions for the island’s development, meaning travelers will face a small additional charge on each hotel night.
During a workshop focused on tourism management, the governor endorsed the proposal to significantly raise the levy. Raywat A-reerob, the head of the Provincial Administrative Organization (PAO), was also present at the meeting.
Nirat defended the drastic measure by highlighting the immense economic power of the tourism sector. He stated that hotels, tourism, and gastronomy are the backbone of Phuket, providing the majority of jobs. Consequently, he believes a greater contribution to the island’s costs is proportionate.
3 Percent Surcharge for Hotel Beds
The governor provided an example using a hypothetical room price of 1,000 Baht per night. Under the new regulations, this would incur an additional 30 Baht as a “local development fee.”
“This is how Phuket will achieve prosperity without relying on taxes from others,” Nirat explained.
The funds collected are earmarked for initiatives such as international roadshows, designed to further stimulate tourism and maintain the target of 14 million visitors annually.
Eight Out of Ten Hotels Currently Evade Taxes
A significant challenge identified is that only a fraction of accommodations currently contribute to the fund. Estimates suggest that 80 percent of hotels in Phuket are not properly registered, thus completely circumventing the levy.
The governor made it clear that any establishment not built on public land or beaches must now apply for correct permits. Unregistered houses will also be required to pay the fees moving forward.
Billion Baht Windfall Through Legal Tax Shift
Merely through the increased tax on already registered hotels, the PAO anticipates an annual revenue of 1 billion Baht. If the shadow hotel sector can be brought into legal compliance, revenues could potentially rise to 1.5 billion Baht.
Nirat expressed even grander ambitions, envisioning that if a comprehensive maintenance fund could be established, annual income could reach between 4 to 5 billion Baht.
“It’s about showing love for Phuket by helping to pay taxes,” the governor appealed.
Tax Office to Monitor Collections
The implementation is planned to proceed without lengthy legislative changes. Existing regulations already permit a maintenance fee within a range of one to three percent. The tax office will be tasked with meticulously tracking hotel payments. The objective is to collect all dues simultaneously and in full, ensuring no hotel bed goes untaxed.