Starting in 2024, the Cabinet has approved initiatives recommended by the Ministry of Finance to promote Thailand as a tourism destination, aiming to boost income from international tourists to 1.5 trillion baht.
Measures to decrease taxation on wine and alcoholic beverages were implemented, along with a reduction in the tax rate for entertainment venues and businesses from 10 percent to 5 percent, effective for a year until the end of December 2024.
This strategy is expected to increase spending by both tourists and locals, fostering a high-quality tourist segment in the future.
Ekniti Nitithanprapas, head of Thailand’s Finance Ministry, stated that under the new tax system, the cost of wine priced below 1,000 baht will decrease, while more expensive wines will maintain similar prices.
He illustrated that previously, a wine priced at 10,000 baht incurred a tax of 1,000 baht. With the updated policy, this tax will be reduced to 600 baht.
Following the tax adjustment, wine excise tax revenue is projected to increase by 900 million baht. This marks an increase from the previous year’s collection of 2.5 billion baht, up from 1.8 billion.
The former tax system, based on price tiers, has been revamped to align with international norms.
Lavaron Sangsnit, from the Finance Ministry, noted that customs tax on specific wine categories (22.04 and 22.05) is now exempt, affecting 21 items previously taxed at 54% and 60%.
Household and rice-based spirits with an alcohol content of not more than 7% are now taxed at 0% value, a change from the previous 10%, plus 150 baht per liter of alcohol.
The revised entertainment tax and incentives are expected to encourage informal businesses to register, offering greater entrepreneurial flexibility. Registered businesses, which declined from 1,500 to 700 during COVID-19, are anticipated to rebound.
Furthermore, VAT refund procedures for tourists have been streamlined, expected to reduce the annual count of tourists presenting goods for VAT refunds from 120,000 to 30,000, starting December 1, 2023.
Phornchai Thiravetch, leader of the Office of Economic and Financial Policy, estimates that around 34-35 million overseas tourists will visit in 2024.
By positioning Thailand as a key destination for tourism and expenditure, income from these tourists is anticipated to rise to 1.5 trillion baht, surpassing the initial target by 2.9 billion baht.
Average spending per tourist is likely to increase from 42,000 baht to 43,400 baht. Concurrently, a roughly 3 percent increase in alcohol consumption is expected, in line with past trends.
