Thai retailers urge government to reassess import taxes on luxury goods

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The Thai government is being implored to reassess the import taxes imposed on luxury goods to mirror the tax rates in neighbouring countries. This is a strategic move aimed at attracting foreign tourists and bolstering the competitiveness of Thai small and medium-sized enterprises (SMEs) against established foreign brands in the country.

The call for this revision comes from Yol Phokasub, the President of the Thai Retailers Association (TRA) and the CEO of Central Retail Corporation (CRC).

Yol voiced concerns that if the import taxes on luxury goods remain unchanged, it could hamper Thailand’s potential to maximise gains from the upturn in tourism.

Yol expressed an optimistic view of the short-term economic stimulus policies that the government has recently rolled out, stating that they seem to be steering towards the right direction. However, he also noted that the pace and immediate impact of these policies will largely hinge on the government’s implementation.

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As local consumption is a substantial contributor to the country’s GDP growth, Yol stressed the importance of bifurcating the economic stimulus measures into two categories.

The first category aims to incentivise high-spending customer groups to maintain their current spending levels. The second category seeks to help customers with lower spending power by reducing their living costs. Yol suggested the introduction of digital wallets as a feasible solution.

Digital wallet policy

Yol further noted that for the digital wallet policy to succeed rapidly, the government needs to actively engage in deliberations with the private sector. If executed effectively, this policy could potentially stimulate the economy by increasing the money in circulation by three to five times.

Yol also addressed the issue of numerous overseas brands entering the Thai market, thereby significantly affecting Thai SMEs. He suggested that the government should take measures to strengthen and upgrade the country’s SME brands.

In Yol’s view, two-thirds of the retail and service sectors are dependent on SMEs. He cautioned that if these sectors do not experience growth, it could stymie the overall growth of the country’s economy.

With more foreign tourists visiting Thailand, Yol underscored the need for the government to encourage them to spend on more than just travel. He also acclaimed the government’s efforts to boost tourism in Phuket and suggested that it be made a tax-free zone.

“We anticipate the government’s recently approved measures to boost consumer spending will help double people’s spending power over the next 6-7 months, provided the recently announced policies are implemented seriously.”

Suchada Ithijarukul, group CEO at Central Food Wholesale under the CRC umbrella, expressed confidence in Prime Minister Srettha Thavisin, who comes from the private sector.

Daily minimum wage

Suchada believes he will prioritise the economy above all else. She indicated that the government’s plan to increase the daily minimum wage will not significantly impact the company due to the phased implementation approach.

Chadatip Chutrakul, CEO of Siam Piwat Co, also commended the government’s planned proposal to raise the daily minimum wage.

he noted that Siam Piwat already pays its employees salaries that surpass the proposed minimum wage.

Chadatip also praised the government’s plan to offer free visas to tourists from China and Kazakhstan, suggesting that the government should also focus on boosting flight availability and negotiating with airlines to increase the number of flights to Thailand, reported Bangkok Post.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.

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