The government's fresh initiative to charge a tax on tourists who visit Thailand is not a bad idea. But it should not be executed until the government has mapped out an effective plan to manage and allocate the potentially huge revenue generated from the levy.
The Tourism and Sports Ministry last week proposed the idea as a means to develop and rehabilitate tourism destinations and provide insurance for tourists who fall sick or are injured here. It floated the initiative after the National Tourism Policy Act was enacted and published in the Royal Gazette on Wednesday.
Some clauses of the new law allow the ministry to outline strategic tourism development plans and set out tourism safety standards and measures.
The details of the plan are currently being thrashed out by the ministry, Naresuan University and the Office of the Insurance Commission.
This is not the first time the idea of a tourism tax has been mooted. In 2013, the Public Health Ministry proposed collecting a 500-baht fee from each foreign visitor who arrived by plane. The money would have been partially earmarked for healthcare coverage for tourists. In 2016, the Tourism and Sports Ministry also proposed a US$10 tourist tax per visitor.
But these plans failed to materialise, largely due to fears about their effect on tourist numbers.
The idea of a levy on visitors to a country is not a new one, and 42 countries around the world have imposed a tourist tax at one time or another. They include Bhutan, Japan, Laos, New Zealand, Indonesia, France, Spain, Italy and Switzerland. Some imposed the tax in all parts of their countries while others reserved it for those travelling to particularly overcrowded destinations.
There are two main reasons usually cited for such a measure, the first being to generate income to improve tourist facilities and services, and the second that it helps to limit visitor numbers in particularly popular areas.
For Thailand, if the tax is imposed, it should mainly be done so for the former reason.
Thailand is a well-known destination for travellers. Last year, the number of foreign visitors hit 38 million, contributing more than 2 trillion baht to the economy. They should receive better care from the country and this would be one way to ensure that.
If the $10 levy from the 2016 proposal was applied, Thailand would have collected $380 million, or about 12 billion baht, from foreign visitors last year. Such a huge amount of money could be used to significantly improve facilities, infrastructure and security for tourists.
A tourism tax would not drive away tourists as long as the rate is sensible, such as that proposed in 2016, and the payment process is made convenient. In fact, it is far more likely that poor services, insufficient facilities and lax security are already dissuading tourists from coming here.
One major concern that logically arises concerns exactly how this large new stream of revenue would be managed.
The government needs an efficient mechanism to administer the funds. The capital must be allocated fairly to local authorities based on the level of overcrowding in each province. More importantly, the tax money must not be used for any purposes other than tourism development.
A far bigger question is how to ensure that the money is used transparently without corruption entering the process. If the government cannot answer this question confidently, then the tourism tax plan should once again remain on the shelf.