Thai airlines push for jet-fuel tax reduction
Thai Airlines Association seeks excise cut amid industry challenges, while the Finance Ministry stipulates that any tax cuts must lead to lower ticket prices
The Thai Airlines Association (TAA), representing low-cost carriers, recently met Deputy Finance Minister Julapun Amornvivat to discuss the option of reducing jet fuel taxes.
The association made this request in response to the current liquidity challenges faced by airlines and continued weakness in the industry.
“The Finance Ministry has acknowledged the issue, but this matter involves several stakeholders, including the Energy Ministry and the National Energy Policy Committee, who need to also participate in the deliberations,” Julapun said.
He added that the Finance Ministry had suggested that the association consider other state mechanisms for support, such as credit measures and government initiatives to drive the “Ignite Thailand” scheme, which focuses on boosting the tourism sector.
At the last Cabinet meeting on economic issues, the target for incoming tourists for this year was revised upwards to 36.7 million.
Additionally, discussions with the airline association also touched on the subject of public complaints over the high price of domestic flights. The ministry asked TAA to clearly outline how a reduction in jet fuel excise tax would translate into lower costs for consumers. Julapun added that if the TAA can guarantee that the tax reduction will benefit consumers by lowering travel expenses, then there would be a stronger justification for the government to consider approving the proposal.
“Nonetheless, the association's request suggests that it might be an appropriate time to review the tax rates, as the current tax base, which was calculated from an average price since 2017, stands at 4.73 baht per litre,” he said.
The Cabinet had previously approved a measure reducing the excise on jet fuel for domestic flights to 0.20 baht per litre from April 2020, to June 2023.
