Phuket eyes tripling hotel tax to boost local development
Phuket is considering raising the hotel tax from 1% to 3% to fund local development and boost tourism promotion. This change could bring in up to 1.5 billion baht annually by including unregistered hotels, supporting efforts to attract more visitors and improve infrastructure.
Key Points
- 1Phuket currently charges a 1% hotel tax but may raise it to 3% to increase revenue.
- 2Raising the tax could generate about 1 billion baht annually, or 1.5 billion including unregistered hotels.
- 3The increased funds aim to support tourism promotion and sustainable local development.
- 4Efforts are underway to bring unregistered hotels into the tax system without new laws.
Phuket authorities are considering increasing the hotel tax from 1% to 3% of room rates to raise funds for local development and tourism promotion. This move was discussed at a recent tourism management workshop amid ongoing global energy challenges. The current law permits provinces to levy up to a 3% tax on hotels, and Phuket’s neighbor Phangnga already charges 2%.
The outgoing governor, Nirat Pongsitthithavorn, highlighted that raising the tax rate to 3% could generate around 1 billion baht annually, with potential to reach 1.5 billion baht if unregistered hotels are also included. The revenue would support marketing efforts like international roadshows to attract more tourists, aiming for 14 million visitors annually compared to last year’s 11 million. Tourism and hospitality remain the island’s main economic drivers and largest employers.
A significant challenge is the 80% of hotels currently unregistered and not paying local development taxes. The administration plans to encourage these establishments to register properly, especially if they do not encroach on public land or beaches. The Revenue Department will assist in ensuring all hotels comply with tax payments, which can be done without new legislation. The governor emphasized that increased tax revenue would contribute to Phuket’s sustainable development and enhance its tourism infrastructure.
Despite the proposal, Governor Nirat is currently pending transfer following internal disputes. However, he continues in his role until the official order is published. The community can expect ongoing efforts to balance tourism growth with local development needs, supported by increased funding from the hotel sector.
