Domestic Tourism Tax Rebates Proposed to Boost Flailing Industry

BANGKOK — The president of Thailand’s Tourism Council has proposed providing tax refunds for domestic tourists in an effort to resuscitate the country's devastated tourism industry.

Piyaman Techapaiboon said she would officially submit a proposal to the military junta's National Council for Peace and Order (NCPO) in the next joint meeting between the private sector and state authorities.

In the proposal, Ms. Piyaman calls for giving up to 20,000 baht per person in tax rebates for spending related to domestic tourism. Examples of related spending include staying at "legally registered" hotels and taking trips from tour companies that have been registered with Ministry of Commerce.

"We believe that if this proposal is approved and enforced in time, it will greatly boost tourism in the upcoming [tourist] high season," said Ms. Piyaman.

Thailand's tourism industry, which generates significant revenue for the country each year, has been suffering from a prolonged slump since demonstrations against the government of Prime Minister Yingluck Shinawatra broke out in November last year.

The protesters occupied major intersections and government buildings in Bangkok, while shadowy militants launched regular attacks on the protesters' camps. More than 30 people were killed over the six months of street protests. 

The protest campaign ended after the Thai army toppled the elected government in a coup d’etat on 22 May, bringing back a sense of calm to the country. However, the martial law imposed by the military junta has continued to discourage many potential tourists from visiting Thailand.

According to data released by the Tourism Authority of Thailand (TAT), tourist arrivals for the first seven months of 2014 dropped by 10.47 percent compared to the same period last year, likely due to political unrest. Revenues from tourism for the same period also dropped by eight percent. 

However, Ms. Piyaman believes the tax rebates and other measures will help Thailand reach its original goal of achieving 800 billion baht in tourism revenue and 148 million in domestic tourism trips by the end of 2014.

"The [tax refund] should be in place for a year to raise awareness among tourists and give them time to plan their trips," Ms. Piyaman said, adding that similar measures were experimented with for three months under former Prime Minister Abhisit Vejjajiva in 2010 but that the results were "unclear."

Meanwhile, deputy president of the Tourism Council of Thailand Thanate Worasaran said the tax rebates proposed by Ms. Piyaman will cost the state more than 4 billion baht, but claimed the loss could be easily compensated for with VAT and corporate taxes.