Recent announcements from the Excise Department reveal a reduction in tax rates for alcohol and nightlife establishments, effective immediately, aimed at stimulating tourism and local spending.
Director-general Ekniti Nitithanprapas explained that these tax adjustments, aligned with measures sanctioned by the cabinet on Jan 2, are designed to position Thailand as a premier tourist destination. The government envisions Thailand as a hub for dining experiences, enhancing its appeal to both domestic and international visitors through competitive pricing strategies.
Key changes include a decrease in the ad valorem tax rate for grape wine and sparkling grape wine from 10% to 5%, along with a reduction in the tax rate based on quantity. Similarly, tax rates for fruit wines and local liquors have been revised to incentivize lower prices and boost consumer engagement.
Furthermore, tax relief for night-time entertainment venues such as nightclubs and bars, with the ad valorem tax rate now halved from 10% to 5%, is expected to drive footfall and spending until the year’s end.
While these tax reductions aim to make alcoholic beverages more affordable, particularly for tourists, they are also seen as an interim strategy to support operators impacted by the pandemic and revitalize local employment opportunities.
Despite this, adviser Thanakorn Kuptajitti of the Thai Alcohol Beverage Business Association expressed reservations, noting that the current tax changes primarily benefit specific alcohol producers, overlooking the wider range of preferred beverages like whisky, brandy, and beer. He recommended lifting the long-standing alcohol sales suspension from 2pm to 5pm, as this could have a more significant impact on tourism and local commerce by addressing customer demands and operational hurdles faced by eateries.
In essence, while the recent tax adjustments aim to stimulate alcohol-related tourism and spending in the short term, there are calls for broader reforms to have a more comprehensive impact on the industry and consumer behaviors.
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