Guidelines of appropriate tax levy for homestay accommodation Case Studies of Homestay Businesses in the Western Region

Abstract

This research is aimed to (1) study the problem situation and tax incentives of the government towards homestay business and (2) determine appropriate tax levy guidelines that will benefit the homestay business. The informants include the homestay operator in western region that operates as a community enterprise, the non-community enterprise homestay operator that are still under Thailand Homestay Standard certification period from the Department of Tourism, and the non-community enterprise homestay operators which are not certified for Thailand Homestay Standard from the Department of Tourism but have been registered as the non-hotel accommodation from the Department of Provincial Administration. The in-depth interview and content analysis of the data were applied. The results of the study were as follows: (1) the association of homestay business operators arises from the demand of standard certification or government support. In the beginning, there were some problems in order to form the group. However, after the group assembly, the Thailand Homestay Standard accreditation from the Department of Tourism was not difficult to most homestays. The registration of non-hotel accommodation was problematic instead. Most of the revenue from homestay business is not the main income, but only supplementary income. Homestays that are accredited or able to form a community enterprise will receive adequate support from government agencies. Since the government's tax levy only benefits the community enterprise homestays, they will be exempt from income tax on the portion of their income that does not exceed the first 1.8 million baht. Other types of homestay can get the benefit in the schemes of small and medium enterprises (SMEs), which is a government tax measure for all types of business. (2) The existing income tax from homestay operators is appropriate. The state lays down the criteria for tax exemption only to the homestay operators who are under the community enterprise gathered from 7 households with different families. Based on the government's intention for the promotion of business integration in community, this may be discriminatory benefits for individual private sector from the downsizing to 2-3 people per group. Currently, the income tax exemption by the first 1.8 million baht for the community enterprises is reasonable. This is consistent with the income that is exempt from VAT. However, community enterprises that have not yet been registered as a legal entity should be supportively assigned to government incentives with income tax exemption for less than a period of 10 years in order not to overburden the government.