Thailand Extends Tax Incentives to Domestic Travel Companies

In a move to further stimulate domestic tourism, the Thai Government finally decided to extend the current tax allowance for travel for another two years, reports the daily Bangkok Post. The measure should help to boost revenues in the tourism sector, probably Thailand’s most resilient economic activity for now. The Kingdom is confronted with sluggish economic growth due to a slump in consumption and in exports. The slowdown in the Chinese economy is likely to have also a negative effect on Thailand’s evolution this year.

The Revenue Department has agreed to the renewal of the tax break for domestic tour packages, hotel accommodation and tour guide service fees for two more years after it expired last month, deputy director-general Somchai Saengratnaneedet declared to the Bangkok Post. The measure was adopted in December 2014 to stimulate an industry battered by political violence and chaos prior to the Military Coup.

Tourism now accounts for a mere 10% of GDP. The Tourism Authority of Thailand (TAT) has revised up its domestic tourism revenue target for this year to THB 850 billion (US$23.4 billion) from THB 802 billion (US$22.1 billion) previously projected. TAT governor Yuthasak Supasorn said the extension of the travel tax break would directly benefit the tourism sector.

The measure would be more effective if it were customised to be in line with the strategies of the Tourism and Sports Ministry and the TAT, which are now focusing on promoting secondary destinations towards domestic travellers. .“We want to distribute revenue to secondary provinces and convince people to travel more on weekdays to reduce congestion during long holidays and festive seasons,” delcared Yuthasak Supasorn to the Bangkok Post.