Thailand ponders reviving outbound travel tax
Tourism executives says timing is bad as travel sentiment is already weak
The Revenue Department is studying the feasibility of reviving an outbound travel tax on Thai nationals.
Officials are researching practices in other countries, especially developed nations, that have similar taxes in place, said Pinsai Suraswadi, director-general of the department.
Thailand has imposed a departure tax on all travellers, Thai and foreign, since 2007. Currently 700 baht, it is automatically included in the price of international air tickets. The outbound travel tax, if adopted, would be collected separately.
The country first imposed an outbound travel tax in 1981 in response to an economic crisis because the government wanted to prevent capital outflows. The levy applied to individuals travelling abroad by land, sea or air.
However, the tax was gradually exempted and then abolished.
Mr Pinsai said that during the period when the travel tax was in place, even in times of economic crisis, Thais continued to travel abroad.
Although the tax generated revenue, the collection costs were high and rendered it inefficient, leading to its eventual discontinuation, he said.
In the past, travellers had to purchase a coupon from designated booths before departing the country, which incurred high operational costs.
The Revenue Department is now considering alternative methods such as online payment platforms or through the mobile app of Krungthai Bank (KTB).
“The department is studying whether it is appropriate to impose this tax. If implemented, the department is considering which method should be used for tax payment,” said Mr Pinsai.
“The payment method may need to be updated, either through an online system or via the KTB app.”
In addition to an outbound travel tax, the department plans to encourage individuals to repatriate income earned from foreign investments by offering a tax exemption for a two-year period. After two years, normal tax rates would apply.
The details of this policy are still being finalised, said Mr Pinsai.
‘Timing is off’
Chotechuang Soorangura, vice-president of the Thai Travel Agents Association, said collecting an outbound tax from Thai travellers would definitely impact travel sentiment, consequently affecting the overall tourism industry.
He said the tourism industry draws its strength from healthy traffic from inbound and outbound tourists, with travel exchanges between targeted countries.
For instance, airlines are more willing to operate routes that provide them with both international and domestic passengers.
Moreover, a collection method that requires travellers to pay separately from the cost of air tickets would be troublesome, as evidenced when it was tried 44 years ago, said Mr Chotechuang.
He said some countries, such as Japan, include an outbound tax in the airfare because it is charged to all passengers regardless of nationality.
“We understand that the government would like to create new sources of revenue. But instead of streamlining other unnecessary expenses, they would mostly target individuals or small and medium-sized businesses.”
“The current situation is different from 44 years ago, and it’s not reasonable to tax travellers amid this downturn.”
Source: https://www.bangkokpost.com/business/general/3036647/thailand-ponders-reviving-outbound-travel-tax
