Thai authorities have approved measures to lower alcohol prices and reduce taxes on entertainment venues to boost tourism.

The Thai government has approved measures to reduce alcohol prices recommended by the Ministry of Finance to promote Thailand as a tourist destination, boost tourism, and increase revenue from foreign tourists to 1.5 trillion baht, Khaosod reported.

The measures adopted by the government include lowering excise rates on alcoholic beverages and reducing the tax rate on entertainment and amusement venues from 10 per cent to 5 per cent of annual revenue for 2024.

The Cabinet anticipates that the approved measures will lead to increased spending by both international and domestic tourists at all levels, increasing the share of high-quality tourists in the long term.

The new tax structure will allow wine costing less than 1,000 baht to become cheaper, while wine costing more than 1,000 baht will have a similar price, said Ekniti Nitithanprapas, head of the Revenue Department.

“Previously, wine worth 10,000 baht was taxed at 1,000 baht. Under the new policy, the tax will be only 600 baht,” Ekniti gave an example.

It is estimated that excise duties on alcoholic beverages will increase by 900 million baht after the tax structure is adjusted. Excise duties on wine and spirits have been steadily increasing and totalled 2.5 billion baht last year, up from 1.8 billion baht in the previous period.

It is also noted that the previous taxation structure was not in line with international standards as it was levied based on price levels and adjusted to become more international.

The Customs Department has also amended the structure of customs duties on alcoholic beverages to match the adjustment of the excise duty structure. Import duties on wines, which reach 54 per cent and 60 per cent of the value of goods, have been cancelled for one year, said Lavaron Sangsnit, permanent secretary of the Finance Ministry.

Excise rates on low-alcohol drinks and rice-based spirits with an alcohol content of 7 degrees or less are now based on a tax rate of 150 baht per litre of pure alcohol instead of the previous 10 per cent of the value.

The changes to the tax rate for entertainment businesses are believed to motivate owners of informal establishments to register operations to gain more flexibility formally.

Before the pandemic, Thailand had 1,500 registered businesses, but the number dropped to 700 during the spread of the Covid. The ministry expects the measures to increase the number of registered companies and bring it closer to pre-pandemic levels.

In addition, the criteria for checking goods for VAT refunds to tourists have been improved. This will reduce the number of tourists queuing to present purchased goods for VAT refunds.

The new criteria, effective from 1 December 2023, are expected to reduce the number of tourists presenting goods for VAT refunds from 120,000 to 30,000 per year, corresponding to a reduction from 333 to 84 people per day, a reduction of more than 75 per cent.

An estimated 34-35 million foreign tourists will visit the country in 2024. Promoting Thailand as a tourist destination means international tourism revenue will rise to 1.5 trillion baht, or 2.9 billion baht more than the original target, explained by Phornchai Thiravetch, director of the Economic and Financial Policy Office.

Spending per tourist is expected to increase from the original 42’000 to 43’400 baht. At the same time, alcohol consumption is expected to increase by 3 per cent, based on historical statistics.

More than 27 million foreigners will visit Thailand in 2023. Tour traffic last year was less than the pre-pandemic 2019 figure when a record 40 million foreign tourists visited the kingdom and the tourism industry accounted for 12 per cent of GDP. The decline in tourist numbers is largely attributed to a drop in tourist traffic from China. Despite this, Thailand expects to welcome 34 million foreign tourists in 2024.

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