Thailand
Thailand: Import duty cut up in the air
The Finance Ministry has not made a decision on whether the import duty on luxury brands will be temporarily cut to 5% from 30% as proposed by the Tourism and Sports Ministry to boost tourism this year.
The Tourism and Sports Ministry has not made an official request to the Finance Ministry, so the latter cannot comment on the issue, said Finance Minister Uttama Savanayana.
Yuthasak Supasorn, governor of the Tourism Authority of Thailand, recently said he asked for the Finance Ministry to cut the import duty on luxury products to attract foreign tourists, especially Chinese ones, to visit Thailand and encourage them to spend more.
A source at the Finance Ministry who requested anonymity said the ministry needs to gauge the value and effectiveness of such a tax cut in attracting foreign tourists to Thailand, as price is not the only deciding factor for wealthier tourists. Other factors, such as variety of luxury products offered, are also considered.
Thailand does not receive anything from selling brand-name products as they are imported and foreign travellers can claim a 7% value-added tax (VAT) refund, said the source.
Moreover, the tax reduction could lead to practical problems as the import duty rate on luxury brands is based on product categories, the source said.
For instance, the Customs Department would have to slash the import duty on leather across the board, which includes several kinds and prices ranges of imported leather, the source said.
A few weeks ago, the economic cabinet approved a new round of tourism measures, aimed at luring 39.8 million foreign arrivals and bringing in 2.04 trillion baht in spending this year.
The new tourism stimulus measures cover both short-term measures for this year and some for 2020.
The short-term measures include free re-entry visas for foreign tourists who visit neighbouring countries by land, increased VAT refund agents, more downturn VAT refund venues and VAT refunds in cash on the spot.
A measure to make it easier for 150,000 expatriates in the country to travel nationwide without having to report themselves to the authorities, as required by Section 37 of the 1979 Immigration Act, also known as TM30, will also be introduced.
Source: https://www.bangkokpost.com/business/1777149/import-duty-cut-up-in-the-air