(9 Setpember) The plan by the
Ministry of Finance to cut import tax on luxury goods down to 5% has been welcomed by many luxury
malls, as they believed the new regulation will boost the country’s economy, particularly in the tourism
and service sectors.
According to the Ministry, Thailand will gain as much as billions of
baht from the policy, 10 times higher than the expected loss from the missing import tax, Prachachat
reported.
Ms. Chadathip Jutrakul, Managing Director of Siam Piwat Co., Ltd., said that
the government’s proposal to make Thailand ‘a shopping paradise’ is an appropriate response to the
demands of the tourists.
According to the statistic provided by Prachachat, foreign tourists
counted as 30% of customers for Siam Discovery and Siam Paragon each year. So far, the malls fail to
attract more customers, particularly from China and Middle Eastern countries, as they tend to shop
in Malaysia and Singapore for 0% taxed goods.
Ms. Chadathip added, “definitely, there are
pros and cons to the new regulation, but I am sure that the government can work on rebalancing the
situation.”
The Emporium Group managing director, Mr. Kriangsak Tantipiphop, voiced the same
support by suggesting that reducing the tax would allow Thailand to become a regional-centre for
luxury goods, and should reduce the numbers of Thai tourists travelling abroad each year to spend at
least 50 billion baht on premium goods.
Mr. Kriangsak dismissed concerns that the tax deduction
scheme would affect local manufacturers. He insisted those brands target different
customers.
According to Prachachart, many brands are planning to march to Thailand with their first
branch here, including brands such as Joseph, Vanessa Bruno, Paul&Joe, Markus Lupfer, Tibi, Emma
Cook, House of Holland, Sass&Bide, Richard Nicoll, Mawi, Shourouk, Venna, Sophie Hulme and
Robert Clergeri.
Meanwhile, many land developers in Bangkok have announce blueprints for new
luxury malls, including Central Embassy, The Emporium 2 and 3, Siam Piwat-CP joined Luxury mall, and
the renovation for Gaysorn Plaza.
Mr. Peter Lee, Senior Marketing Director in Asian Pacific
Region of Hotels.com, said that the luxury tax cut will boost the tourism sectors, particularly by
attracting more Chinese tourists as 69% of tourists from China visit Thailand for the purpose of shopping.
Similarly, Ms. Nanthinee Tanner, Managing Director of LBG Co. Ltd, Thailand
distributor for Burberry, said that the tax reduction policy would support Thai distributors to be
able to compete with their counterparts in Hong Kong and Singapore.
After the Finance Ministry announced the plan, Ms. Nanthinee said that her company and its British headquarters are
revising the strategy for future sales.
However, some in the Thai manufacture industry have
voiced scepticism at the plan, noting that the slashing of import tax would make it harder for
Thailand-based luxury brands to compete.
Some analysts also express their worry that the
government might end up raising other taxes, such as the VAT or corporate tax, in order to
compensate the missing revenue from the highly lucrative luxury imports.
