Phuket will “definitely’ impose hotel room tax

PHUKET: Hotels in Phuket are preparing for tough negotiations with the Phuket Provincial Administration Organization (OrBorJor), which has announced that it will begin collecting tax from hotels in October. The tax will be based on revenue from rooms only. The OrBorJor president, Dr Prasit Koysiripong, told the Gazette today that although the law allows the rate to be as high as 3% of the room charge before VAT, the rate will “probably” be no more than 2% in Phuket. But Pamuke Achariyachai, president of the Phuket Tourist Association (PTA), said that in the first year of the new tax a rate of 0.5% to 0.8% is probably the most that hotels here will be willing to pay. “Two percent is too high,” he said. “Most hotels have already pre-sold their rooms at contract prices to tour wholesalers, so they will have to swallow the entire tax burden themselves.” He added, “However, I am optimistic that the OrBorJor will be flexible.” Between now and October, there will be more talks between the OrBorJor and the PTA. “The rate may be changed,” Dr Prasit said, “but the OrBorJor will definitely start collecting the tax on October 1.” The OrBorJor has had the power to levy the tax for more than a year, but last year hesitated to impose it amid fears that the 1999-2000 tourist season would be a poor one. In July last year it imposed two other taxes – one on tobacco and the other on fuel.