Tax cut in bid to salvage boating industry

PHUKET: In a move likely to prove ‘too little too late’, Thailand’s cabinet has approved reduction in the country’s levies on imported pleasure boats from 209% to 47%. Sources contacted by the Gazette in Phuket and Bangkok were not prepared to speculate on a firm date for final approval or implementation of the measure, but there was a consensus that it will be “soon”. The decrease, assuming it is passed into law, will come about solely as the result of a whopping cut in the excise (luxury) tax, from 111% to 5.30%. All other imposts, including import duty, remain unchanged. The move, according to Bangkok-based government spokesman Yongyuth Tirapairat, has been taken in order to stimulate Thailand’s flagging boat building, marine services, and tourism industries. Following a radical hike in the excise tax on pleasure vessels in 1996, tax receipts on yachts imported into Thailand have plummeted to almost nothing. In Phuket, the collections have been “nil”, according to the local branch of the nation’s Revenue Department. But it was not only the staggering amount of the boat tax increase that hobbled Phuket’s yacht-tourism and marine services industries – it was also the timing. The crocodile opened its jaws in the midst of a concerted and highly successful campaign by neighboring Langkawi (Malaysia) to lure yachts out of Phuket and into that island’s tax-free waters. And compounding Phuket’s ‘Langkawi problem’ was the advent, a few months after the tax hike, of the 1997-98 regional financial crisis. It was, as is now acknowledged by the Thai government, a period in which the presence – not the absence – of a robust yachting community would have been of demonstrable benefit. Will the pleasure craft be returning to Phuket? “No,” says a Hong Kong-based yacht owner who asked not to be named. “I moved my boat out of Thailand in 1997. I’m perfectly happy with it in Langkawi. I’ll take it to Phuket for the King’s Cup [regatta] again this year, but have no thoughts of berthing it there permanently,” she said. “Why would I want to pay 45-50% in taxes when I can park for nothing in Langkawi?” Pleasure boats based outside of Thailand, such as the scores of them slated to participate in this year’s Kings Cup, are allowed to visit the Kingdom for up to six months without incurring any taxes or duties. Boat owners contemplating berthing their vessels here beyond six months may calculate their total tax and duty costs, before and after the anticipated slash in excise tax, at

Phuket News

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