Bangkok: The government’s plan to reintroduce the full levy for the land and building tax in the 2022 tax year has hoteliers concerned, following a 90% reduction of the tax granted to property owners during the pandemic years.
Though the government agreed to offer a 15% discount in 2023, this tax cut was weaker than what the private sector expected.
The Thai Hotels Association (THA) called for an extension of the tax cut for another two years, or an incremental increase by 5-10% per year, in order to let hotels maintain a healthy balance sheet as the industry suffered a severe loss in income for more than two years.
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A study by the THA and the University of the Thai Chamber of Commerce found 93.6% of respondents said taxes, which account for almost 16% of their costs, will continue to have a negative impact as they cannot earn enough to cover increasing expenses.
Moreover, many hotels have started repaying loans at normal interest rates after a rate cut was granted the past two years to mitigate the economic impact.
Hoteliers have particular concerns about this issue as the tax is calculated based on new land appraisal values set by the Treasury Department, with an average increase in land prices of 8% set for next year.
Minor International Plc last month urged the government to allow businesses to pay the tax in three instalments without interest or penalty fees for late payment.
The Joint Standing Committee on Commerce, Industry and Banking also proposed a tax reduction for another two years at 75% and 50% in 2023 and 2024, respectively.
Source: Bangkok Post
