Duty-free to tempt Thai tourists

PHUKET: The government is launching a temporary duty-free project in Phuket, Phang Nga and Krabi Provinces from September 1 through December 31, to entice Thai tourists to the region.

The announcement was made by Deputy Finance Minister Warathep Rattanakorn at a meeting dubbed “Recover three Andaman provinces with Duty-Free” at Dusit Laguna Resort on Saturday.

K. Warathep explained that the government needs to encourage Thais to spend in Thailand, particularly in Phuket, Phang Nga and Krabi, instead of shopping in Singapore or Hong Kong.

Currently, Thais must pay a 7% value-added tax, but foreign tourists can apply for a tax refund at their international airport of departure.

During the four-month duty-free period, the rules for those who want to buy duty-free are as follows:

– The Thai tourists must be staying in Phuket, Phang Nga or Krabi Provinces.

– From designated duty-free retailers, they may buy multiple duty-free products worth up to 20,000 baht per night stayed, but not exceeding 50,000 baht in total.

– Alternatively, they may opt to buy just two duty-free items of unlimited value.

– They may buy duty-free products no more than once a month.

Alcohol, cigarettes, cigars and pipe tobacco products are not included in the duty-free project, as these items are regulated by Customs, rather than the Ministry of Finance.

At the time of purchase, Thai tourists must produce their passport or ID card to show that they do not live or work in any of the three provinces, along with a return air ticket or boarding pass and evidence of hotel accommodation, or evidence (such as a travel itinerary) that they part of a tour group.

Check-point locations have yet to be determined.

For the time being, it seems that foreign residents in the three provinces concerned also may be able to buy duty-free items during the four-month project period.

K. Warathep explained that the government has not considered ways to stop foreigners living or working in Phuket, Phang Nga or Krabi from taking advantage of the duty-free promotion; the short-term project simply aims to encourage Thais from outside these provinces to visit.

“We hope people will come to these three provinces for more than just shopping. We would like them to take their time here,” he said.

“While our duty-free campaign is aimed at attracting tourists, success should not be measured just in terms of the volume of products sold,” he added. “If 100 tourists visit and just 10 of them shop here, we would still consider it a success.”

“Now we need to urge hotels to generate certificates their guests can use to prove where they are staying. Check points also need to be set up somewhere.”

Customs Department Director General Sathit Limpongpan said, “Three companies – King Power, selling items such as chocolate and silk items popular among tourists; Siam Sawasdee, a Thai-French joint venture that sells leather goods, cosmetics and electronics among other things; and Wang Talang, the lapidary – have confirmed their participation in the project.”

K. Sathit added that, in order to be ready for the campaign on September 1, Customs will be hard-pressed to compile the manual for retailers participating in the project.

Phuket Governor Udomsak Uswarangkura remarked that he wondered about the timing of this duty-free project, as the idea of Phuket as a duty-free zone was raised long before the tsunami.

“Investors are not likely to put their all into the campaign when it is to last just four months,” he pointed out. “If the time frame were longer, they could make more comprehensive business plans to cover both the low and high seasons and the project would attract more retailers [to take part].”

K. Warathep responded, “We may consider a longer-term plan. Whether or not Phuket could be an entirely duty-free province is still under consideration.

“In the meantime, I do believe that the four-month duty-free project will jump-start [domestic] tourism to Phuket, Phang Nga and Krabi.”