Thailand to Boost Retail Appeal
In a bid to attract high spending visitors to the country, Thailand’s Finance and Tourism ministries have agreed a range of new retail focused initiatives, including the opening of duty-free pickup counters at all international airports across the country.
According to a report in The Nation newspaper, other proposals made include instant VAT refunds, exclusion of VAT upon the purchase of selected items, reduction of important tariffs on selected consumer items and a new scheme to promote a sale of quality Thai brands.
According to Rawittha Pongnuchit, an authority on tax law and former director-general of the Revenue Department, the moves are designed to boost Thailand’s economy. “We are pleased that the government responded positively [to our proposals] and is ready to introduce them within a specified time frame,” he told the press, adding that all of the measures are aimed at encouraging foreign tourists to spend more whilst on holiday in the Kingdom.
The new duty-free pick-up counters are expected to be established in Thai airports within the next two months. Meanwhile, a working committee will be set up to deliberate on the exclusion of VAT from selected items. The government is also set to continue endorsing tax breaks for consumers that were introduced at the back end of 2015, according to the Thai Retailers Association (TRA).
“The tax measure endorsed for the last seven days of last year helped the whole retail sector to grow by 3.1 percent in 2015, up from 2.8 percent in an earlier forecast,” said Jariya Chirathivat, president of the TRA. “It would be great if the government could extend this scheme to cover foreign tourists in order to encourage more spending while they stay in the country,” she added.
According to data collected by the TRA, the average daily spend per visitor to Thailand is approximately THB5,000 (US$137). Almost one third of this figure goes to the retail sector. However, Khun Jariya also noted that the average tourist’s retail outlay in Thailand is half what they would spend in Singapore and a quarter of what they would spend in Hong Kong. “The problem is tourists don’t come to Thailand mainly for shopping, because most luxury goods here are more expensive than in Singapore and Hong Kong,” she said.
updates by Wayne Hue