Thailand eyes pre-pandemic tourism levels by 2024, revamps VAT refund process
Thailand, a popular tropical destination, is anticipating a return to near pre-pandemic tourism levels by 2024. In 2019, the country welcomed nearly 40 million overseas visitors, contributing 12% to the nation’s GDP. However, the Fiscal Policy Office projects a recovery to approximately half that number this year, following the pandemic, and predicts a return to 90% of the 2019 levels in 2024.
Thailand’s diverse natural and cultural offerings, along with compelling shopping opportunities, draw tourists worldwide. Duty-free shops in the arrival and departure zones of Suvarnabhumi Airport serve these travellers. However, the Finance Ministry is proposing the cancellation of duty-free shops for arrivals, encouraging tourists and returning Thai citizens to spend within the country. The proposal is backed by King Power, the sole operator of duty-free concessions, which will continue to pay the same concession fee.
The removal of duty-free shops on arrival aims to support domestic stores that do not offer tax exemptions. “Regular stores in the country will benefit from the policy,” said permanent finance secretary Lavaron Sangsnit. “Abolishing duty-free shops in arrival areas of airports will stimulate domestic spending among locals and foreign tourists.”
In addition to this, the Finance Ministry is considering reducing the beverage tax on imported and local wines, spirits, and beers and relaxing the opening hours at night entertainment venues in major tourist districts. The measures, aimed at boosting tourism and domestic spending, have received in-principle approval from the cabinet. The goal is to increase income and generate jobs in tourism-related businesses such as restaurants, hotels, entertainment venues, and transport service providers, reported Bangkok Post.
The Revenue Department has revamped the VAT refund process for tourists to cut down queues for customs declaration. From December 1, 2023, the new regulations will increase the value of products that bypass customs procedures. The threshold for goods to be shown to customs officials has been raised from 5,000 baht to 20,000 baht (US$ 143 to 572). This adjustment should reduce the number of tourists needing to show their goods from 1.7 million people a year to about 500,000, cutting queues from 4,800 people per day to 1,400 people per day.
The value of nine product categories (jewellery, gold ornaments, watches, eyeglasses, pens, smartphones, laptops, tablets, and handbags) requiring presentation to revenue officials has been increased from 10,000 baht to 40,000 baht (US$ 286 to 1,144) per item. The value of carry-on goods has also been increased from 50,000 baht to 100,000 baht (US$ 1,430 to 2,860) per item. This should reduce the number of tourists who must show their goods from 120,000 people a year to about 30,000, or from 333 people per day to 84 people per day.
Goods bought from stores displaying the VAT Refund for Tourists sign, valued at least 2,000 baht (US$ 57) (VAT included) per day, per store, qualify for the refund. Tourists who purchase goods valued at 20,000 baht (US$ 572) or less can claim tax refunds from the Revenue Department without undergoing customs procedures.
