Government auditors accuse Pattaya hotels of dodging taxes, order crackdown

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Thailand’s Office of the Auditor General has told Chonburi authorities to crack down on Pattaya hotels, citing a substantial shortfall in expected tax revenue.

In a document sent to the Chonburi Provincial Administrative Organization, the OAG accused many Pattaya hotels of dodging taxes altogether, saying the region’s tax revenue pales significantly compared to other tourist destinations in the kingdom.

(L to R) TAT Pattaya office director Athapol Vannakit, Chonburi PAO President Wittaya Kunplome, and THA Eastern Region President Bundarik Kusolvitya discuss the recent claims by Thailand’s Office of the Auditor General that not enough taxes are being collected from hotels in Chonburi province, which includes Pattaya.(L to R) TAT Pattaya office director Athapol Vannakit, Chonburi PAO President Wittaya Kunplome, and THA Eastern Region President Bundarik Kusolvitya discuss the recent claims by Thailand’s Office of the Auditor General that not enough taxes are being collected from hotels in Chonburi province, which includes Pattaya.

PAO President Wittaya Kunplome told an Aug. 8 meeting of the Thai Hotels Association Eastern Region that only 19 million baht in taxes were collected, substantially less than areas like Phuket, Bangkok or Koh Samui.

“I sympathize and understand that our hotels are having a difficult time with their businesses. But this year, the OAG has sent a letter stating that too little in taxes has been collected,” Wittaya told the meeting at the Royal Cliff Beach Resort. “I will discuss this with the provincial government council and inform the association of the new tax rate later.”

Currently, Wittaya said, the province collects a half-baht off every daily room rental, the minimum required by law. The law tax rate was agreed upon with the hotels association “long before I came into office,” Wittaya said, as a means to spur tourism.

THA Eastern Region President Bundarik Kusolvitya told members that the auditor’s office has instructed Chonburi authorities to step up efforts to collect taxes from hotels.

Bundarik, meanwhile, rejected the notion that association members were cheating on taxes, blaming the revenue shortfall on a plunge in room bookings during March.

“If booking rates in Phuket or Samui are compared with Pattaya, there are obvious differences. So, of course, the tax amounts collected in those areas will be higher,” Bundarik said.

“I am confident that the members of the association pay taxes,” Bundarik continued. “But there are other (non-member) hotels in this city that pay no taxes. I think the PAO should take measures to collect taxes from these hotels outside the system. When this is done, the OAG will be satisfied with the results.”

She warned Wittaya that the association would object to a large increase in tax rates, claiming the industry was fragile and could not support much-higher taxes.

The Tourism Authority of Thailand’s Pattaya Office reported at the same meeting that hotel bookings were running 70-80 percent of normal. In March, bookings had fallen to 50 percent of average.