Jet fuel tax reduction extended again to aid airlines, tourism

FILE PHOTO: A tax reductions is hoped to keep prices low and encourage more domestic travel.

A tax reduction, for jet fuel that has been in place to help the airline industry during the Covid-19 pandemic, has been extended until the end of 2020. With international travel decimated, this tax cut is aimed to help airlines stay afloat and get more customers with lower prices while travel figures are massively down.

The extension was scheduled to end this month but will be extended until December 31 according to the director-general of the Excise Department with the Thai Cabinet’s consent.

The continuing reduction will be welcomed but domestic airlines’ ready problem at the moment is a huge softening of demand, mostly as a result of the government’s new round of restrictions and province’s added travel restrictions and procedures.

The cabinet agreed to lower the excise tax to 20 satang per litre from 4.726 baht at the beginning of last year to help distressed domestic airlines coping with Covid-19. The Excise Department says that this tax fuel cut probably won’t have much effect on the government’s revenue from taxes as it accounts for only 1 billion baht yearly.

The tax reduction has been extended already as it originally expired September 30 2020 but was extended this year until April 30 as Covid-19 still wreaks havoc on the tourism industry. The goal of this extension will be to reduce the financial burden on airlines in Thailand to keep their business afloat and planes in the sky. The extension also aims to help the travel industry in Thailand overall as the tourism sector is imperative to long-term economic recovery when the Covid-19 pandemic finally ends.

Tourism is an essential part of Thailand’s economy, contributing 16 to 17% of the gross domestic product generally. Before Covid-19, foreign tourists entering Thailand reached nearly 40 million people in 2019. But once global shutdowns began at the beginning of 2020, the number of entering tourist understandably tanked. Through all of last year, only 6.7 million people were recorded arriving in Thailand, 83% less than 2019.

The government is aiming to vaccinate at least 60% of the population of Thailand in order to reopen the international borders by October without quarantine or restriction. It is hoped that the third quarter of 2021 will bring an influx of international tourists, though the recent third wave outbreaks have put the reopening timeline on shaky ground.

SOURCE: Bangkok Post

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Neill Fronde

Neill is a journalist from the United States with 10+ years broadcasting experience and national news and magazine publications. He graduated with a degree in journalism and communications from the University of California and has been living in Thailand since 2014.

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