The government has threatened to take legal action against retail shops and department stores who raised their products' price ahead of the shopping tax break period.
Deputy Commerce Minister Sontirat Sontijirawong said the ministry had assigned the Internal Trade Department's authorities to investigate immediately after complaints that at least one department store was found to take advantage of consumers by raising prices prior to the year-end shopping tax breaks.
Last week the cabinet approved the shopping tax break to spur year-end consumption during the festive season. The incentive will let individual taxpayers deduct up to 15,000 baht of taxable income from the value of goods and services bought between Nov 11 and Dec 3.
This is the third straight year for a year-end tax incentive. Last year a similar incentive was offered during Dec 14-31, while the scheme in 2015 lasted only seven days. In the past two years only purchases from retailers and distributors registered under the value-added tax system were eligible for the tax deduction.
"These are considered unfair and dishonest trading practices, and authorities stand ready to take legal action against such retailers," said Mr Sontirat. "Penalties include a maximum of seven years' imprisonment and/or a fine of up to 140,000 baht, or both."
Boonyarit Kalayanamit, director-general of the Internal Trade Department, said after an investigation, the accused department store defended the price increase as the expiry of a promotion period, which misled customers.
However, Mr Boonyarit said the department pledged to investigate more on this issue and will circulate letters to all department stores to warn them against any unreasonable price changes.
In a related development, retailers are spending heavily on their sales campaigns to boost year-end figures during the shopping tax incentive.
Retail operators have started to decorate their stores to make them more colourful, allocating a combined budget in excess of 1 billion baht from The Mall Group, Central Pattana, Robinson and Central Department Stores, Tesco Lotus, Big C, and Fashion Island complex for their campaigns from now until January.
Promotions include cash coupons, special discounts, gold necklaces, mini-concerts, incentive tours and a Black Friday event, the popular US sales day after Thanksgiving.
Chamnarn Maytaprechakul, executive vice-president of The Mall Group, said he believes consumer spending power and a celebratory mood may gradually return purchases to 2015 levels.
"We've seen clear signs of positive shopping sentiment at many of our business units. The tax break has been vital in stimulating shopping the first two days of the campaign, with 43,200 tax invoices issued," Mr Chamnarn said.
The company is allocating 400 million baht for its "Gift of Life 2018" campaign at The Mall Department Store, The Emporium and Paragon Department Store from now to Jan 9, 2018, also available on its digital platform.
Piyawan Leelasompop, executive vice-president for marketing at Central Department Store, said the company is spending 100 million baht to launch its flower and marketing event on Nov 16-20 at its Chidlom branch and Nov 16-26 at Embassy. Central expects to draw 150,000 visitors to its event.
The company is offering a 30% discount at all department store branches along with its "700 to Die For" campaign, offering 700 products discounted up to 90% during Nov 24-26 at Chidlom.
Siam Retail Development Co, the operator of Fashion Island, Promenade and Terminal 21, plans to spend 30 million baht on marketing for the period.