Thailand
Thailand: Revenue defends VAT refund contract award
The Revenue Department has insisted selecting Counter Service Co, a payment service provider wholly owned by CP All Plc, to provide value-added tax (VAT) refunds for foreign tourists outside airports was done in a transparent manner.
Three companies sought licences to run the VAT refund service outside airports, but two of them failed to meet the criteria, said Pinsai Suraswadi, director of tax policy and planning at the Revenue Department.
One of the failures was in not stating in its articles of association that it will engage in offering VAT return service, while another requested to have five VAT refund points, which was more than the department’s criteria, which limited applicants to three points, he said.
The department’s criteria focused on applicants’ qualifications and their appropriateness in providing the service, such as the density of foreign tourists in the proposed refund points, security, fees and technological readiness, said Mr Pinsai.
Counter Service is offering VAT refund service to foreign tourists as part of a six-month pilot project. The Revenue Department will evaluate the service after the trial run, seeing if it meets its objectives to reduce the number of foreign tourists claiming VAT at airports, helping refunded money to be circulated in the domestic economy instead of being spent outside the country, he said. Another goal is to avoid leakage.
The six-month trial run spans Oct 1, 2018 to March 31, 2019.
Foreign travellers can claim a VAT refund at three branches of Counter Service at 7-Eleven convenience stores: Phadung Dao Road in Yaowarat, near Lido Cinema in Siam Square and in Bangkok Night Bazaar on Rama IX Road.
The Thai Retailers Association scheduled a press conference today to take a stance on the decision to award Counter Service the contract.
Mr Pinsai said Counter Service charges a 10% fee for VAT refund service and the same criteria for VAT refunds at airports are applied.
Each foreign tourist can receive a VAT refund of no more than 12,000 baht per trip, and a minimum of 2,000 baht in purchases per day per merchant can be claimed for the refund. To receive 12,000 baht as a VAT refund, a tourist must spend almost 200,000 baht on goods and services in Bangkok and vicinity.
However, high-value products including ornamental gold, jewellery, watches, pens, eyeglasses, smartphones, portable computers and items valued at 10,000 baht and higher must claim a VAT refund from revenue officials.
This year 2.5 million foreign tourists claimed 2.5 billion baht in VAT refunds, up 54% from all of last year.
Source: https://www.bangkokpost.com/business/finance/1551038/revenue-defends-vat-refund-contract-award