The Cabinet has acknowledged the policy proposed by the Ministry of Finance to promote Thailand as a tourism and shopping hub. This policy includes “halting the tax benefits of bonded warehouses for the sale of duty-free shops (Duty-Free) for incoming travelers by operators.” It is expected that this will increase the Gross Domestic Product (GDP) by 0.012% per year.
The right to purchase various products within incoming duty-free shops reduces the chances that tourists will spend on consumption and purchasing goods within the country. The idea of canceling the permission to establish bonded warehouses for the sale of duty-free shops, including tax exemptions for the purchased goods, aims to promote domestic consumption. The goal is to redirect the spending amounts to circulate more efficiently within the country, thus adding overall economic value.
The measure to cancel Duty-Free shops for incoming passengers at 8 international airports includes:
- Suvarnabhumi Airport
- Don Mueang Airport
- Chiang Mai Airport
- Phuket Airport
- Hat Yai Airport
- U-Tapao Airport
- Samui Airport
- Krabi Airport
Benefits and Impacts of Canceling Duty-Free Shops for Incoming Passengers:
- Increased Spending by Foreign Tourists: Foreign tourists are expected to increase their spending within the country, leading to a more widespread distribution of spending on goods and services domestically.
- Choices for Thai Travelers: Thai travelers may opt to purchase duty-free goods from their country of origin or increase their spending on similar goods within the country, depending on various decision-making factors.
- Loss of Revenue for Duty-Free Operators: Operators of bonded warehouse duty-free shops will lose revenue from incoming duty-free sales. It is estimated that this will result in an additional circulation of up to 3,460 million baht per year to other retailers and stakeholders in the tourism sector, creating opportunities and having a positive impact on production, investment, and employment.
- Impact on Government Revenue: The increased circulation of money will benefit a broader range of retailers and lead to an expanded tax base for the government, particularly in terms of income tax and value-added tax.
- Overall Economic Impact: It is estimated that halting the operation of incoming duty-free shops for one year will result in a 0.012% annual increase in GDP.
Source : The Government House
Photo: Freepik
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