The government's latest 30,000-baht tax break, offered to taxpayers buying goods and services, is expected to boost Thailand's electrical appliance market to more than 200 billion baht in value.
Executives at retailers and appliance companies such as Power Mall, Toshiba, Sony and Sharp share the belief that the latest tax incentive will stimulate consumer spending power in the fourth quarter, which is the market's peak sales season.
The Center for Economic Situation Administration approved a proposal on Wednesday to offer taxpayers income tax deductions of up to 30,000 baht for purchasing products and services with a 7% value-added tax (VAT), in another bid to boost domestic consumption.
Effective from Oct 23 until Dec 31, the tax deduction offer will apply to the 2020 tax year and is forecast to inject 120 billion baht into the economy.
All types of goods and services with VAT will be included in the tax deduction programme, with the exception of alcoholic beverages, tobacco products, government lotteries, fuel, accommodation and air tickets.
"The fresh tax break will help curb the overall electrical appliance market's earlier projected drop of 20%," said Jakkrit Keeratichokchaikun, chief business officer of speciality business for The Mall Group.
Mr Jakkrit said the appliance market fell 17% year-on-year for the first nine months of this year, the biggest-ever decline for the sector.
"More people are staying home and working from home, boosting consumption of some electrical appliances such as smart IT and small appliance products," he said. "I am happy with the new government's tax incentives because the measure is appropriate for middle-income spenders."
Mr Jakkrit said the middle class is likely to buy electrical appliances and fashion items, helping increase domestic consumption.
Thailand's electrical appliance market was worth 240 billion baht in 2019.
Mr Jakkrit said that with the added incentive the overall electrical appliance market in 2020 is estimated to reach 200 billion baht, a 16.6% drop from 2019.
"We have good sales experience with the government's last economic stimulus package, driving sales of our mobile phones in particular to grow by 30%," said Satoshi Mekata, general manager of Sony Thailand. "This time we hope for the same experience from the new tax incentive this year."