The chances of shopping tax incentives to stimulate year-end tourism look thin after Finance Minister Apisak Tantivorawong said yesterday that the benefits of such measures remain unclear.
The ministry must weigh the benefits and the fiscal burden before approving the proposal and bringing it to the cabinet, Mr Apisak said.
He said he had yet to receive a proposal from the Tourism Authority of Thailand (TAT) on tax measures to stimulate the tourism industry.
"If it [the tax incentive proposal] is aimed at promoting tourism-based communities, people living in these communities will be able to share more in tourist income and such incentives will be a boon and are likely to be offered," Mr Apisak said. "The tax incentives should not be allowed for all destinations."
The TAT on Tuesday held discussions with the private sector, including the Thai Hotels Association (THA), the Association of Domestic Travel and various airlines, on ways to spur tourism in the remaining months.
TAT officials agreed to ask the cabinet to approve the year-end shopping tax break, a short-term measure to stimulate domestic consumption that was used in the past few years.
They proposed a tax break permitting a deduction from taxable income on retail spending from September to December.
Under the proposal, tourists who spend during the designated period would be allowed to claim a deduction from personal income tax of 10,000-50,000 baht, depending on the area visited.
If they travel and spend money in flood-hit areas such as Sakon Nakhon province, they will be entitled to a tax deduction of 50,000 baht, five times higher than for top destinations like Phuket and Chiang Mai.
The TAT is hopeful that the tax initiative will help boost domestic travel, especially in remote and non-popular destinations.
Last year's tax deduction was capped at 15,000 baht, the same as a year earlier.
The offer is not valid for purchases of alcohol, tobacco, vehicles, motorcycles, ships or fuel for vehicles and ships.
THA president Supawan Tanomkieatipume said the tax rebate would help stimulate overall domestic tourism, especially during the low season.
The association, however, is urging non-registered hotels and resorts to get their businesses licensed so they can reap more benefits from the scheme.
Ittirit Kinglake, president of the Tourism Council of Thailand (TCT), also hailed the proposal, saying the tax incentive would boost tourism sentiment and help tourism operators.
"We expect the tax break to enable operators to secure more clients," he said. "That means higher income."
Mr Ittirit said tourism sentiment is seen as having improved in the second quarter of the year and should maintain strong momentum through the second half.
The TCT earlier predicted that Thai people would make more than 150 million trips this year, up from 147 million in 2016.
The council also estimated that if no bad incidents occur in Thailand, the country would receive 8.04 million international tourists during the second quarter, up 6.4% year-on-year.
The TCT expects 8.75 million foreign visitors to flood into Thailand in the third quarter, a rise of 6.4% year-on-year.
A source at the THA's Chiang Mai chapter said the wide range of the tax break would hit major destinations like Chiang Mai, as tourists may shift to second- or third-tier attractions.
In other news, Tourism and Sports Minister Kobkarn Wattanavrangkul yesterday visited Sakon Nakhon province and met local administrations and business operators to seek a restoration of the province after the recent floods.
She said all stakeholders in the province are calling on business and state agencies to hold meetings and activities to stimulate tourism in Sakon Nakhon and nearby provinces.
The Agriculture and Cooperatives Ministry reported that the floods hit an estimated 4.44 million rai of farmland, 27,456 rai of livestock farming areas, 1.18 million domestic animals, 416 square metres of nets used for fish farming and 467 rai of grazing land.