Illegal hotels/accommodation may face crackdown

[buksida]

The Thai Hotels Association may ask the junta to use its near-absolute power to force unregistered hotels out of business, as police have been doing little to tackle the problem.
Surapong Techaruvichit, president of the THA, said the hospitality sector had considered speaking directly with the military-led regime about the problems caused by unregistered hotels and asking it to use the interim constitution's Article 44 to get rid of such illegal operations.

"The association and registered operators believe that if Article 44 is used, the number of non-registered properties will decrease," he said.

According to the THA, more than half of the hotels in the market are unregistered.

It is estimated that of the more than 18,000 hotels in the country, only 8,000 are registered, comprising 400,000 rooms. That leaves more than 10,000 hotels with more than 400,000 rooms operating illegally.

In Bangkok alone, it is estimated that there are more than 300 illegal hotels, and many more are in major tourist destinations such as Phuket, Chiang Mai, Pattaya and Hua Hin/Cha-am. These illegal properties include serviced apartments, guest houses, condominiums, houses and other private properties that provide accommodations for tourists. They are not registered as hotels with the Interior Ministry's Department of Provincial Administration (DPA), the official unit that approves and issues hotel licences.

Surapong said the THA had provided lists of illegal hotels to police, but since 2014, only 20 hotels had been charged and fined Bt3,000-Bt10,000 each.

Most of them have resumed operations. Some have been charged more than once, but remain in the market.

Last year, the association gave the names of 10 illegal hotels to police, but only a few hotels were charged.

"We don't know why police are unable to help us with these hotels, so we will ask the government for help," Surapong said.

The latest to be charged was Pangsawan Place Hotel in Chiang Mai. It was charged by officers of the DPA with operating in violation of laws governing hotels.

It was one of nine illegal hotels charged in 2014. The other eight were in seven tourist destinations.

The THA claims that unlicensed hotels may offer substandard quality and could even be unsafe for guests, damaging the entire tourism industry.

Source: The Nation

Thought: Wonder if this will filter down to private house/condo rentals, chasing those up is going to be one hell of a job!

[Big Boy]

Thought: Wonder if this will filter down to private house/condo rentals, chasing those up is going to be one hell of a job!

Those were my exact thoughts as I was reading it - plenty of tea money to be made there if it becomes another ambiguous area.

Strange, but every new regulation these days seems to come with a new tea money opportunity, depending on interpretation.

[StevePIraq]

I have always been amazed how Thailand survives financially. Hardly any individuals pay income tax, few smaller businesses pay tax, these illegal/unregistered hotels will not be paying tax, people who rent out their homes will not be paying tax so just how does Thailand get any income?

[Name Taken]

I have always been amazed how Thailand survives financially. Hardly any individuals pay income tax, few smaller businesses pay tax, these illegal/unregistered hotels will not be paying tax, people who rent out their homes will not be paying tax so just how does Thailand get any income?

I think it's the rich elite Thai's that are against an income tax and the Thai Government just backs them up 100% because both they and the Thai Government are corrupt.
Also no sales tax here in Thailand.

[Bristolian]

Also no sales tax here in Thailand.

Isn't 7% VAT that is applied a sales tax?

[buksida]

Yes, VAT is on almost everything and the import taxes this country has are astronomical.

If an elected PM dodges tax what kind of message does that send to everyone else?

[StevePIraq]

The VAT is only charged at formal businesses, none of the smaller shops or street vendors charge VAT and pay nothing as tax. I doubt many restaurants charge VAT.

Why would the rich elite be against income tax, I am sure they pay some tax, the bigger issue is the larger Thai population who pay no taxes at all.

[Pleng]

I have always been amazed how Thailand survives financially. Hardly any individuals pay income tax, few smaller businesses pay tax, these illegal/unregistered hotels will not be paying tax, people who rent out their homes will not be paying tax so just how does Thailand get any income?

Let me introduce you to the Thai middle class...

[Name Taken]

The VAT is only charged at formal businesses, none of the smaller shops or street vendors charge VAT and pay nothing as tax. I doubt many restaurants charge VAT.

Why would the rich elite be against income tax, I am sure they pay some tax, the bigger issue is the larger Thai population who pay no taxes at all.

I don't even know what VAT is, but when I buy something in a store here in Thailand and the price says 1200 baht then I pay 1200 baht at the cash register and the item is mine.
Why should the larger Thai population be burdened with taxes when most of them are very poor?

[Name Taken]

Yes, VAT is on almost everything and the import taxes this country has are astronomical.

If an elected PM dodges tax what kind of message does that send to everyone else?

The reason import taxes are astronomical is because local Thai businesses, companies and industries do not like competition. It's protectionism because a lot of products that are made in Thailand can not compete with foreign made products and if the import taxes here in Thailand weren't so high then some of these Thai businesses and companies would be run out of business overnight. Just my opinion.

[StevePIraq]

The VAT is only charged at formal businesses, none of the smaller shops or street vendors charge VAT and pay nothing as tax. I doubt many restaurants charge VAT.

Why should the larger Thai population be burdened with taxes when most of them are very poor?

Because not all are poor, everyone has to contribute to a countries economy. The main point here being that these illegal accommodation businesses pay no tax to the government hence are not directly contributing to the economy.
Overall tax revenues in Thailand equates to 15 percent of the domestic economy.
Government spending amounts to 24.9 percent of domestic production, and public debt equals 45 percent of gross domestic product. A country cannot continue this way. http://www.heritage.org/index/country/thailand

Tax rates in Thailand are as follows.
Corporate Tax Rate 20 %
Personal Income Tax Rate 35 %
Sales Tax Rate 7 %
Social Security Rate 10 %
Social Security Rate For Companies 5 %
Social Security Rate For Employees 5 %

[Name Taken]

The VAT is only charged at formal businesses, none of the smaller shops or street vendors charge VAT and pay nothing as tax. I doubt many restaurants charge VAT.

Why should the larger Thai population be burdened with taxes when most of them are very poor?

Because not all are poor, everyone has to contribute to a countries economy. The main point here being that these illegal accommodation businesses pay no tax to the government hence are not directly contributing to the economy.
Overall tax revenues in Thailand equates to 15 percent of the domestic economy.
Government spending amounts to 24.9 percent of domestic production, and public debt equals 45 percent of gross domestic product. A country cannot continue this way. http://www.heritage.org/index/country/thailand

Tax rates in Thailand are as follows.
Corporate Tax Rate 20 %
Personal Income Tax Rate 35 %
Sales Tax Rate 7 %
Social Security Rate 10 %
Social Security Rate For Companies 5 %
Social Security Rate For Employees 5 %

[Bristolian]

Interestingly the Bangkok Post published figures relating to Income Tax payment in 2014

According to the Revenue Department's data for 2014, of all income tax returns, there were only 3.96 million people eligible to pay Income tax in Thailand . With a population estimated at 67 million that’s approximately one tax payer supporting 16 who pay no tax
Those earning below 150,000 THB were not required to pay tax
The largest taxpayer group or 1.63 million people was those earning 150,001 to 300,000 baht per year.
The smallest number of taxpayers or 24,700 people declared their personal income at more than 4 million baht a year. This seems to be an incredibly low number
As for corporate income taxable in 2014, there were only 310,000 Thai registered companies required to pay tax. an incredibly small number when you consider companies, private hospitals, hotels etc