Relaunch of travel tax cuts needed
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THE reintroduction of tax deductions for meeting and travel expenses is expected to compensate in the short term reversal for the massive decline in foreign tourists. However, if the military regime really wants to lure tourists back, it must cancel marti
Surapong Techaruvichit, president of the Thai Hotels Association (THA), said the tax deduction would help hotel and related businesses slightly, but only for the short term.
He said the measure was re-endorsed in a bid to restore tourism after the political crisis, but it was only relevant for the domestic segment, while the overall tourism sector is suffering from a huge decline in foreign visitors.
This measure has often been used to boost domestic travel after previous crises such as airport closures, tsunamis and floods.
The Cabinet on Tuesday approved the Finance Ministry’s proposal to introduce tax deductions to boost domestic travel. Finance Minister Sommai Phasee said the measure should increase domestic spending, which would stimulate the economy while having only a minimal effect on government revenue.
Maximum of Bt15,000
Under the measure, individuals will be allowed to deduct the cost of domestic travel from their personal income tax to a maximum of B15,000 a year, while company expenses on local seminars are fully deductible from corporate income tax. The measure is effective from now until December 31, 2015.
Surapong said tax deductions were among the urgent measures that the private tourism sector had proposed to the government earlier. However, the lifting of martial law is the most important thing to restore tourism by drawing foreigners back to the Kingdom.
Sanpeh Sanpech Supabowornsthian, president of the THA’s Eastern Chapter, said the tax measure would help fill up hotel rooms in some provinces, especially in low season. The scheme is also expected to boost related businesses such as restaurants and bars, transport, shopping, entertainment, and other activities.
He said registered hotels nationwide should benefit from this scheme while illegal operators might lose business. Many private and public organisations would consider choosing only registered hotels as they can deduct meeting and travel expenses from their taxes.
“In Pattaya, which now is facing an oversupply of rooms, registered hotels should benefit from this measure,” he said, adding that the government should introduce more recovery measures to boost the entire sector, not just domestic travel.
