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Dr Pisit Leeahtam: Phuket can tax its way out of trouble

Phuket Tourist Tax 'What the Island Needs'

Wednesday, August 13, 2008
Thursday TRENDS

PHUKET could have an extra income of 500 million baht a year by taxing tourists just 100 baht each, says leading economist Dr Pisit Leeahtam.

Dr Pisit, who sits on the National Economic and Social Advisory Council, visited Phuket to make suggestions about ways the island can become self-sustaining.

Dr Pisit's opinion carries considerable weight because he is a former Director of the Bank of Thailand, and the chairman of the Foreign Affairs Ministry's Committee on Macroeconomics.

While tourism on Phuket delivers 90 billion baht a year to Bangkok's coffers, the island's working budget amounts to a paltry 150 million baht.

Dr Pisit's presence is evidence that this unbalanced arrangement is not likely to change in a hurry. He has been going to various provinces, spreading the message.

After Phuketwan reported his initial suggestion at a meeting with the governor, Dr Pisit found the time to explain the rationale for Phuket imposing its own tax.

He said that Phuket is close to the top of his list of provinces in need of help.

The 100 baht tax, he said, would apply to both foreign visitors and Thais.

''Phuket can survive on its own,'' he said. ''It's a rich island.

''The poorer provinces of Thailand are the ones that need constant attention and budget support from the national government.''

Dr Pisit, a frequent visitor to Phuket, said he noted that the process of development was growing more rapid.

He said he was concerned about the potential erosion of the environmental beauty of the island and the surrounding region.

''Resort developers, whether they are Thai or international, really have to establish a relationship with the local communities.

''If there are conflicts, both sides will suffer.''

Locals usually benefit in jobs or general prosperity when a village or an island starts to develop an appeal to tourists, he said.

Phuket is fortunate to have natural assets and international drawing power, Dr Pisit said.

Making money from nature should lead people to conclude that it needed protection.

He did not think that a tax of 100 baht to provide better infrastructure would upset many visitors.

More controversially, Dr Pisit also said that an additional island tax on goods such as cigarettes and alcohol would also be an option for Phuket.

''This may not bring joy to smokers and drinkers but it would give Phuket the money it needs for essential services,'' he said.

''It would probably also improve the general health of people on the island.

''Discouraging young people from smoking and drinking and at the same time gaining funds to build roads . . . I can't see any harm in that.''

On his latest visit to Phuket, Dr Pisit went on several tours to outlying islands.

On Koh Lon, the island off Chalong, he told residents that he thought their homestay would be a great place for hard-working Bangkok bureaucrats to come to relax.

He was planning to recommend the destination to others.

Russian Tourism's Western Front

PEOPLE do say that war is a surefire way to boost an economy.

And if that still holds true in a modern global economic downturn, then perhaps Russia will deliver more visitors to Phuket this coming high season.

Wealthy Russians with connections to the travel industry are now buying up large chunks of European tour operators, according to the website businessneweurope.com.

Author Graham Stack in Berlin says Turkey and Egypt are the major destinations. But Thailand is likely to boom, too.

He notes that ''due to the specifics of the Russian tourism business, Russians behave very differently from Europeans, frequently booking only days ahead of their departure date.

''A further difference is the structure of the holiday season. Russians enjoy two weeks of national holidays straight after New Year.

''When the rest of the world is back at work, Russians in their masses escape the winter for warmer climes.''

Experts in the Russian industry say the purchasing of stakes in big European tour companies will enable Russians to offer even lower prices for package tours.

''The surge in fuel price is also putting pressure on European operators, just as global financial turmoil has depressed valuations,'' Stack writes.

''This is opening doors for Russian oligarchs to buy into West European tour operators and airlines, targeting synergies with the booming Russian tourist market.''

Expect to read more about the problems of local Thai guides, unable to find work.

Stack concludes: ''The Inturist PR team were unavailable for comment, since they are all abroad on vacation.''

The Georgians, we guess, will be at home repairing the large holes in their country.

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TRENDS
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To tell us your news, email bigislandmedia@gmail.com or telephone 081 6513489.


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Comments

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'Just 100 Baht Tax' does he think the tourists can be milked forever, especially with a declining world economy, rising prices? Wake up, Dr Pisit. Why can't the government afford to return to Phuket what belongs there, is earned in Phuket and paid for by us tourists?

Posted by Ian on August 15, 2008 12:40


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