The new levy is being proposed by the Revenue Department under a 1983 legal provision with public hearings already scheduled for the coming week. It comes in addition to an existing outbound levy for tourists and a proposed incoming levy of ฿300 which was shelved by the minister in April until a new government takes power later in the summer.
Tourism industry chiefs were shocked this week to discover that Thailand’s Revenue Department is laying the groundwork for a new outbound levy of ฿1,000 to be applied to all outgoing airline passengers from Thailand including foreign tourists and Thai citizens in addition to already existing charges and levies. One key travel industry executive warned that the plans will have a serious negative impact on the country’s still recovering tourism industry and may disrupt the plans of airlines which Thailand badly needs to reconnect to its international airports.
A shock move by the government to introduce a ฿1,000 tax on departures from Thailand is drawing opposition from the tourism industry coming just weeks after the government shelved, for now, its ongoing plans for an incoming tourism levy with the industry already concerned about how the latter should be implemented.
The new initiative is being driven by Thailand’s Revenue Department which has launched a questionnaire in recent days on the proposal and appears to be moving quite swiftly with public hearings already scheduled for this week in line with a 1983 legal provision.
New departures tax proposed is aimed at discouraging outbound Thai holidaymakers spending money abroad, this is being stated clearly at the outset
The new tax on departures, it is being made clear, is aimed at both outgoing foreign tourists and Thai citizens and the stated reason for the tax is to help discourage a growing number of Thai nationals who are recently travelling abroad thereby offsetting the country’s natural economic advantage when it comes to its current account with regards to inward remittances from the foreign tourism sector.
Tourism boss calls for a special state body to manage the new foreign tourism levy postponed yet again
The Revenue Department has made it clear that the purpose of the new tax is to control capital outflows and has aimed its somewhat rushed consultative process at both outgoing foreign visitors and Thai nationals alike.
The proposed new tax would be ฿1,000 for outgoing passengers by air with a reduced ฿500 charge for passengers by land and sea.
The initiative and the details contained in the questionnaire were described as a surprise development by Mr Charoen Wangananont, the President of the Thai Travel Agents Association (TTAA) this week with many in the industry suggesting initially that the report was fake news or misguided speculation.
Tourism industry leader slams the government’s latest move as without reason and far too expensive an imposition at this time for the fragile economy
‘The principle and the levy rate make no sense at all, as Thailand has never had a problem related to a trade deficit in tourism, with inbound income making up 70% of the total, compared with 30% outbound expenditure. In addition, ฿1,000 is too expensive amid current economic conditions,’ said Mr Charoen.
The industry leader made it clear that he opposed the move and warned that it would backfire and have a major impact on the country’s still recovering foreign tourism industry.
‘We thought this was fake news the first time we saw the poll because it is not the right time to do such a move. If the government really thinks it needs to collect a departure tax, it should have done so before the pandemic, when the tourism industry was on an upward trend. The levy rate should also be more appropriate,’ he said.
Japan’s outgoing levy is only ฿250
Chotechuang Soorangura, the Vice President of the Thai Travel Agents Association (TTAA) also raised his concerns about the proposal and called for transparency on how the new tax would be used.
He pointed to a similar tax applied by Japan where the amount levied was only ฿250.
‘In addition to being a very expensive tax rate, there is a lack of transparency as the government could not clarify how it will use that money, which would help prevent corruption. Another concern is the ฿300 tourist tax expected to be charged to foreigners in the near future,’ Mr Chotechuang explained.
Danger of unintended consequences including a negative impact on the airline industry market leaving Thailand without badly needed flight connections
He also warned of unintended consequences of the government’s stated attempt to subdue outbound passenger levels.
This, he warned, quite apart from the negative impression it creates, may also create an imbalance which would affect the travel market and hence the operators of commercial airlines which Thailand needs to connect with its international airports.
The new levy is in addition to an already existing outbound levy of ฿700 for foreign tourists and the proposed new tourist levy for incoming passengers of ฿300 which has been consistently delayed and reworked by the Ministry of Tourism and Sports since the outgoing government came to power after the 2019 election.
The proposal was based on a similar proposal running back to 2013.
The involvement of another government body with a new tax is bound to create further confusion and uncertainty for the industry which has still to fully recover from the setback it suffered in 2020 when the Thai government shut it down completely with an overnight order to close the country’s airspace at the beginning of April 2020 for an extended period.
The move had a catastrophic impact still being felt today.
The proposal also flies in the face of reported efforts by the government in recent months to reduce the cost of flights and travel to Thailand which are impeding the recovery of the foreign tourism industry.
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Further reading:
Tourism boss calls for new state body to manage the new foreign tourism levy postponed yet again
Negative reaction and horror at Thailand’s plan to charge foreigners more than locals at hotels
Concern for the Thai baht and liquidity if Thailand does not move swiftly to raise interest rates
Travel sector calls for endemic status, scrapping of Thailand Pass and full normality on entry
Thailand should move more towards a circular economy as the country faces intractable hurdles
Economy climbing out ‘of a hole’, foreign firm’s confidence levels rose sharply during October
Industry leaders and central bank all warn that foreign tourism must return to avoid a collapse
Fact – only 6,556 visitors arrived in Thailand last month compared to 3.95 million in December 2019
Desperate foreign tourism business concerns are clinging to straws as they try to survive the crisis
Finance Minister says economy must pivot away from tourism with a switch to S-Curve industries
Strengthening baht predicted as investors bet on a reopening of Thailand to mass tourism in 2021
Still time to avoid lockdown says Health Minister as 3rd virus wave dwarfs all infections to date
Thai economy is still in reverse despite rising confidence and a virus threatening a 3rd wave
Reopening of Phuket still not officially approved although it is the ideal test for a broader move
