The government is being urged to reconsider extending the 90% cut on the land and building tax for two years to ease the burden of higher prices as this is the greatest concern among hoteliers, according to a Thai Hotels Association (THA) survey.
"The business situation remains uncertain and operators are not ready to pay the full tax rate. If the Finance Ministry insists on this new tax rate, hotels will have stagnant liquidity and be forced to lay off their workforce," said Marisa Sukosol Nunbhakdi, president of the THA.
The THA and the University of the Thai Chamber of Commerce conducted research on the impact of the land and building tax on the private sector, surveying 220 operators of hotels, apartments, restaurants, properties, developers and retailers from Jan 31 to Feb 4.
Some 93.6% of respondents agreed that the tax, which accounts for 15.7% of average income, would cause a negative impact as they have yet to earn adequate income to cover all their expenses, according to the survey.
She said operators must tighten their belts, which would result in mass layoffs as seen during the early stages of the pandemic two years ago. Some owners may decide to sell their properties to foreign investors, said Mrs Marisa.
THA suggested the 90% reduction be extended for two more years or until the economy experiences a recovery. Another option would be to gradually increase the tax rates by 5-10% per year, said the group.
Mrs Marisa said the ministry has to consider other factors, such as the types of business and income, in its tax calculations because hotels are the most vulnerable type of business in terms of unpredictable events such as a pandemic, political conflict and war.
The hotel operators' sentiment index for March, which polled 127 hoteliers during the period March 11-24, predicted an average occupancy rate for March and April of 33%. Some 39% of hoteliers said their liquidity decreased compared with February, while 44% said they have sufficient liquidity to stay in business for the next three months.
The tourist cancellation rate caused by the war was less severe than when Test & Go was suspended in October 2021, she said.
