Thailand’s Inbound duty-free shops to be closed
Operators reportedly agree with plan that government says will redirect spending to local stores
The cabinet says duty-free shops in arrivals areas of international airports will be closed to encourage more spending by visitors in domestic stores, with projections for up to 3.5 billion baht a year of new local retail spending.
All three operators of inbound duty-free businesses have agreed to suspend the operations at eight international airports, aligning with the government’s policy to promote spending in domestic stores, said Rudklao Intawong Suwankiri, a deputy government spokesperson.
Information on the timing of the move was not available.
Mrs Rudklao said ministers on Tuesday acknowledged guidelines for promoting Thailand as a tourism and spending hub, as proposed by the Ministry of Finance. These include scrapping tax benefits for bonded warehouses for inbound duty-free shops. The ministry will monitor the impact, she said.
Three companies have licences to run bonded warehouses for duty-free shops in the arrivals areas at eight international airports: Suvarnabhumi, Don Mueang, Chiang Mai, Phuket, Hat Yai, U-tapao, Samui and Krabi.
According to Customs Department statistics, sales from inbound duty-free shops totalled 3.02 billion baht in 2023.
The duty-free operators submitted letters acknowledging they would halt all inbound duty-free shop operations, in line with government policy, until such policy is revoked, said the spokeswoman.
Travellers entering Thailand through international airports can generally purchase goods with tax exemptions under the following conditions: Items purchased by travellers entering the kingdom for personal or professional use must not exceed a total value of 20,000 baht; up to 200 cigarettes; up to 250 grammes each of cigars or tobacco, or a combined total not exceeding 250 grammes; and alcoholic beverages up to 1 litre.
According to Mrs Rudklao, the ability of travellers to purchase goods from inbound duty-free shops reduces the opportunity for spending on domestic goods. Therefore, the Ministry of Finance will study the appropriateness of revoking permits for establishing bonded warehouses serving inbound duty-free shops, as well as tax exemptions for items purchased from these shops by inbound passengers.
The goal is to promote domestic consumption and use of local goods, redirecting spending and increasing overall economic value.
The ministry expects the closure of inbound duty-free shops to increase spending of foreign tourists by 570 baht per person per trip.
The impact on duty-free operators from halting operations for one year is expected to result in new cash flow, with a maximum of 3.46 billion baht per year circulating within the retail sector, those engaged in the tourism industry, and general stores.
This would create opportunities and have positive effects on production, investment and employment, thereby increasing government tax revenues, said Mrs Rudklao.
Source: https://www.bangkokpost.com/business/general/2821784/inbound-duty-free-shops-to-be-closed-to-boost-local-spending
