Measures needed to stimulate foreign tourist spending

The Tourism and Sports Ministry aims to expand value-added tax (VAT) refund counters to shopping malls and stores to stimulate foreign travellers’ spending in Thailand.

The country is facing challenges in its ambition to become a shopping destination in Asia, among them the purchasing power of foreign tourists and infrastructure development to facilitate shopping.

Tourism and Sports Minister Sorawong Thienthong said on Monday that one way forward is to make it easier for foreign travellers to obtain a VAT refund.

He said Thailand should allow travellers to request VAT refunds at stores like in Japan, noting that such a move requires the collaboration of the Finance Ministry and the private sector.

While acknowledging the delays at VAT refund counters in airports, Sorawong pointed to the need to attract more foreign travellers to Thailand and encourage them to spend.

This year’s foreign arrivals in Thailand reached 25.41 million as of September 22, generating 1.18 trillion baht in tourism revenue. The top five travellers came from China (5.10 million), Malaysia (3.64 million), India (1.48 million), South Korea (1.34 million) and Russia (1.13 million).

Sorawong said the ministry needs to accelerate events and promotions in the remaining three months to reach the target of at least 35 million travellers, generating 2 trillion baht in revenue.

Thai Hotels Association president Thienprasit Chaiyapatranun told media outlet Krungthep Turakij that the government should expand VAT refund counters like Japan to promote Thailand as a shopping destination in Asia.

In Japan, VAT refund counters are available at shopping malls, as well as small to large stores, he explained.

He added that cashless payments should be available at all Thai stores to facilitate travellers, especially Chinese tourists who prefer to pay via the WeChat mobile app.

“The challenge for the government and relevant agencies is how to make shopping easier for tourists to generate revenue for the Thai economy,” he said.

Thienprasit suggested the government reduce or exempt import tax on products like brand-name goods to stimulate spending by foreign travellers.

“Many years ago, tourists visited Hong Kong to purchase tax-exempt brand-name goods,” he explained, adding that Thailand could not become a shopping destination if tax-free goods were available only in duty-free shops.

He said the government should consider the products on which tax could be reduced or exempted, pointing in particular to iPhones and cameras.

Thienprasit also advised the private sector to monitor the baht appreciation closely, saying that tourists would flock to purchase goods in Thailand once the currency stabilises.