The Revenue Department in Thailand has proposed a new outbound levy of ฿1,000 for all outgoing airline passengers from Thailand, including foreign tourists and Thai citizens. The proposed tax has come as a surprise to the tourism industry and follows the shelving of a proposed incoming levy of ฿300 by the minister in April until a new government takes power later in the summer. Public hearings have been scheduled from May 3-17, and the department has posted a questionnaire on its website to gauge public opinion on the matter.
The new levy is aimed at discouraging outbound Thai holidaymakers from spending money abroad, according to the Revenue Department. The aim is to offset the growing number of Thai nationals traveling abroad, which is reducing the country’s natural economic advantage from inward remittances from the foreign tourism sector. The Revenue Department has made it clear that the purpose of the new tax is to control capital outflows and has aimed its somewhat rushed consultative process at both outgoing foreign visitors and Thai nationals alike.
The proposed new tax would be ฿1,000 for outgoing passengers by air with a reduced ฿500 charge for passengers by land and sea. However, the proposed tax has been met with opposition from the tourism industry, with the president of the Thai Travel Agents Association (TTAA) describing the principle and the levy rate as making no sense at all.
Mr. Charoen Wangananont, president of the TTAA, said that the new tax has come as a surprise and that the principle and the levy rate make no sense at all. He added that Thailand has never had a problem related to a trade deficit in tourism, with inbound income making up 70% of the total, compared with 30% outbound expenditure. He further stated that ฿1,000 is too expensive amid current economic conditions, and the move would backfire, having a significant impact on the country’s still recovering foreign tourism industry.
Mr. Charoen warned that if the government wanted to propose such a tax, it should carefully assess the consequences because it could have a major effect on tourism, exceeding whatever revenue the state estimates it could earn. Chotechuang Soorangura, the Vice President of the Thai Travel Agents Association (TTAA), also raised his concerns about the proposal and called for transparency on how the new tax would be used.
In addition to being a very expensive tax rate, Mr. Chotechuang pointed out that there is a lack of transparency as the government could not clarify how it will use that money, which would help prevent corruption. Another concern is the ฿300 tourist tax expected to be charged to foreigners in the near future. He also warned of unintended consequences of the government’s stated attempt to subdue outbound passenger levels. This may create an imbalance affecting the travel market and commercial airlines that Thailand needs to connect with its international airports.
The proposed tax comes in addition to an already existing outbound levy of ฿700 for foreign tourists and the proposed new tourist levy for incoming passengers of ฿300. The incoming levy has been consistently delayed and reworked by the Ministry of Tourism and Sports.
The tourism industry in Thailand is still recovering from the effects of the COVID-19 pandemic, which saw a significant reduction in tourist arrivals. In 2020, the country received only 6.7 million foreign tourists, a 83% drop from the previous year. The proposed new tax has raised concerns about the potential negative impact on the industry, which is crucial to the country’s economy.
The Thai government has been working to boost the country’s tourism industry with a range of measures aimed at attracting tourists, including visa exemptions and promotions. However, the proposed new tax has been met with opposition from industry leaders, who fear that it will deter tourists from visiting Thailand.
Author: Editorial Staff
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