BANGKOK – Beginning 2024, the Cabinet has approved measures recommended by the Ministry of Finance to promote Thailand as a tourism destination, with the goal of increasing revenue from foreign tourists to 1.5 trillion baht.
They issued measures to lower taxes on wine and community spirits, as well as to reduce the tax rate on nightlife or nightlife businesses from 10 percent of revenue to 5 percent for a one-year term ending December 31, 2024
This will result in higher spending by both international tourists and Thais at all levels, therefore boosting the share of high-quality tourists in the long run.
Ekniti Nitithanprapas, director-general of Thailand’s Ministry of Finance, said the new tax structure will allow wine worth less than 1,000 baht to be cheaper, while wine worth more than 1,000 baht will have a similar price. He gave an example that in the past, a wine worth 10,000 baht had to pay a tax of 1,000 baht. Under the new policy, it will be 600 baht.
It is estimated that the total revenue from the excise tax on wine will increase by about 900 million baht after the adjustment of the tax structure. The direction in which the excise tax on wine is collected has been steadily increasing and was 2.5 billion baht last year compared to 1.8 billion baht previously.
It was also noted that the previous tax structure did not meet the international standard as it was levied based on price tiers, so it has been adjusted to be more international.
Lavaron Sangsnit, the Finance Ministry’s permanent secretary, added that the Customs Department has also implemented an improvement to the customs tax structure of wine products to be consistent with the adjustment of the excise tax structure by exempting import duties on wine products in the 22.04 and 22.05 categories, a total of 21 items, from the previous import duty rates of 54 percent and 60 percent, respectively.
The excise tax rates for household spirits and rice-based spirits with an alcohol content of not more than 7 degrees will now be based on the value at 0 percent, instead of the previous 10 percent, and a tax rate of 150 baht per liter of pure alcohol content.
As for the adjustments to the nightlife business tax and incentives, it is believed that these changes will encourage more informal businesses to formalize their operations and provide more flexibility to entrepreneurs. Before these measures, there were around 1,500 registered companies, but during the COVID-19 period, the number dropped to around 700.
With the implementation of these measures, the Ministry expects the number of registered companies to increase and approach pre-COVID-19 levels.
In addition, the criteria for checking goods for VAT refunds for tourists have been improved. This should reduce the number of tourists queuing to show their purchased goods for VAT refunds.
It is expected that the new criteria, which will come into force from December 1, 2023, will reduce the number of tourists presenting their goods from 120,000 per year to around 30,000. This corresponds to a decrease from 333 people per day to just 84, a reduction of more than 75 percent.
Phornchai Thiravetch, the director of the Office of Economic and Financial Policy, explained that an estimated 34-35 million international tourists will visit in 2024. With the promotion of Thailand as a central hub for tourism and spending, revenue from international tourists is expected to increase to 1.5 trillion baht or an additional 2.9 billion baht from the original target.
Per capita spending is expected to increase from the original 42,000 baht to 43,400 baht. At the same time, alcohol consumption is expected to increase by about 3 percent based on historical statistics.
_____
Related articles:
- Thailand Aims To Create 200,000 Jobs In The EEC Smart City
- Pattaya Business Owners Welcome 4 a.m. Nightlife Closings
