Review on further tax break

Review on further tax break

Passengers throng Don Mueang airport over the New Year holiday. The government may renew the expired domestic tourism tax break. PATTANAPONG HIRUNARD
Passengers throng Don Mueang airport over the New Year holiday. The government may renew the expired domestic tourism tax break. PATTANAPONG HIRUNARD

The Revenue Department may renew the 15,000-baht tax break on domestic tour packages and hotel accommodation that expired last month.

The tax-collecting agency will also decide whether to extend the deduction for one year or two, director-general Prasong Poontaneat said.

Businesses and individual taxpayers were eligible to deduct purchases of domestic tour packages and hotel accommodation, up to 15,000 baht from taxable income, from Dec 15, 2014 to the end of 2015.

The government wants to increase tourism's GDP contribution in order to serve as a buffer against heightened external headwinds, particularly China's cooling economy.

State investment in infrastructure projects such as rail and mass transit could take until the second half of this year to bear fruit for the economy, while private investment remains in the doldrums.

Tourism, one of the few bright spots in the lacklustre Thai economy, now accounts for a meagre 10% of GDP.

Foreign tourist arrivals reached just under 30 million last year and are expected to come in at 32.5 million this year.

Tourism revenue totalled 2.2 trillion baht in 2015 including 1.4 trillion from foreign tourists. The Tourism Authority of Thailand has revised up its tourism revenue target for this year to 2.41 trillion baht from 2.3 trillion predicted previously.

The domestic tourism revenue target was increased to 850 billion baht from 802 billion, while the revenue projection from foreign tourists remains unchanged at 1.56 trillion.

State tourism-related agencies have proposed a "Quick Win" campaign aimed at increasing the frequency of travel by offering a lucky draw worth 1 million baht each month for Thai tourists travelling within the country. It will also offer a big reward each quarter.

The Finance Ministry's Fiscal Policy Office has floated the idea of offering tax incentives to large corporations to persuade them to help develop tourism and improve the quality of goods produced by rural residents to sell to tourists.

Under the proposal, large companies could be allowed to deduct expenses incurred from supporting tourism, up to 2% of their net profit.

Mr Prasong estimates the 15,000-baht tourism expense deduction cost his department 5 billion baht in lost revenue for the 2015 tax year.

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