The Finance Ministry has agreed in principle on a tax break for domestic travel expenses but has asked the Tourism Authority of Thailand (TAT) to adjust the details to allow smaller communities to benefit.
Somchai: Trying to benefit smaller communities
If the tax deduction is provided on a blanket basis, only main tourism destinations such as Chiang Mai and Phuket provinces will benefit, said Somchai Sujjapongse, permanent secretary for finance.
What the Finance Ministry wants is for local people and business operators in communities to receive a share of tourist income, he said, adding that communities entitled to the tax incentive benefits will be certified by the TAT.
"The Finance Minister has agreed in principle to the TAT's [tax deduction] proposal, but he has asked the TAT to adjust details. We need to wait for further details from TAT," Mr Somchai said without providing further information on the proposed tax break.
According to the TAT's initial proposal, tourists who spend during the final quarter of this year will be allowed to claim a personal income tax deduction of 10,000-50,000 baht, depending on the area visited.
The Finance Ministry allowed individual taxpayers to claim up to 15,000 baht in expenses paid for domestic accommodation and tourist agencies during October to December last year and another 15,000 for travelling expenses incurred throughout the remaining months of 2016 from their income tax.
In the meantime, hotel operators and travel companies are being urged to prepare more employees and activities to cope with the increases in free independent tourists (FIT) anticipated in the coming high season.
Thai Hotels Association (THA) president Supawan Tanomkieatipume said more FIT visitors will come to the country, especially during the high season, which falls between October this year until the end of March next year. The number of Chinese tourists is expected to remain high.
"FIT tourists usually need a variety of products, more activities and services -- hotel operators and travel companies should be aware of these needs. Operators may need more staff to serve huge arrivals during high season," Ms Supawan said.
According to the Association of Thai Travel Agents statistics, foreign tourists who came to Thailand with registered companies between January and July this year fell from 3.62 million in 2016 to 3.36 million, a 7.2% decrease.
Ms Supawan said the association is scheduled to organise a conference on "How to be successful and get more FIT guests" early next month to offer hotels and tourism operators specific strategies to deal with individual tourists.
But a lot of tourists, especially from China, will be travelling with tour companies because of a lack of language and travel skills.
"For the first time, THA will also arrange a table-setting competition in September to help hotels improve hospitality for large groups," Ms Supawan said.
Tourism and Sports Ministry permanent secretary Pongpanu Svetarundra yesterday revealed that 3.08 million international tourists travelled to Thailand in July, up 4.8% from the same period last year. Major sources of arrivals were East Asia, Europe, South Asia, the Americas, the Middle East, Oceania and Africa.
The top 10 markets were China, Malaysia, Laos, South Korea, India, Japan, Vietnam, Britain, Hong Kong and the US.
Foreign tourists contributed 156.4 billion baht in income during July, a 6.2% increase year-on-year. The Chinese market provided the highest receipts, followed by South Korea, the US, Britain and Malaysia.
The ministry also reported that the country welcomed 20.41 million arrivals during January and July, or a 4.5% increase from the same period last year, generating tourist revenue of 1.03 trillion baht, a 6.1% rise from the same time last year.
During the first six months of this year, local residents made 71.38 million domestic trips, an improvement of 3.2% from the first half of last year, generating income of more than 453 billion baht or 6.7% growth from the same period last year.
The government aims for 35 million international visitors this year, up from 32.58 million in 2016.