Cabinet approves B15,000 shopping tax deduction

Cabinet approves B15,000 shopping tax deduction

The government is relying on tax breaks and end of year sales to help stimulate the economy. (file photo)
The government is relying on tax breaks and end of year sales to help stimulate the economy. (file photo)

The cabinet has approved a shopping tax break allowing consumers an income tax deduction of up to 15,000 baht on receipted domestic purchases of goods and services from Dec 14-31.

The much-awaited short-term measure has been allowed for the New Year festive season for the second year, but the government this year has extended the purchasing period to 18 days, compared to only seven days in 2015.

The new tax-break does not cover purchases of alcoholic beverages, cigarettes, fuel, cars, motorcycles, boats and hotel accommodation. The government earlier approved an income tax deduction of up to 15,000 baht for hotel rooms and package tours spending in December to promote domestic tourism.

Tourism and Sports Minister Kobkarn Wattanavrangkul said the shopping deduction would stimulate consumer spending and tourism, and encourage tourists to buy gifts for the others. Gift purchases account for 25-30% of spending during this period.

Taking the maximum 15,000-baht deduction from taxable income spent on tour packages and hotel accommodation between Dec 1 and 31 and 15,000 baht spent on the same activities earlier this year into account, the total tax break for this year amounts to 45,000 baht per taxpayer.

Kobsak Phutrakul, assistant minister to the Prime Minister’s Office, said about one million people benefitted from this shopping tax deduction in 2015, getting  about 1.2 billion baht in tax savings from purchases totalling almost 10 billion baht over the week. With the period extended to 18 days this year, it was expected around two million taxpayers would spend around 20 billion baht, with concomitant benefits.


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