WASHINGTON: The Customs Department is poised to cut the 30% import duty on luxury items in an effort to boost tourists’ spending, its chief says. The department will convene a meeting with the private sector this month to arrange the tariff reduction before forwarding it to finance permanent secretary Somchai Sujjapongse for deliberation, director-general Kulit Sombatsiri said.
The new duty level must not hurt domestic manufacturers, he said without elaborating. The move follows frequent requests by the private sector to promote Thailand as a tourist shopping paradise while encouraging Thai consumers to shop at home instead of abroad.
The government is stimulating domestic consumption and tourist spending in a bid to boost economic momentum because public and private investments take longer to deliver results.
It offered tax breaks worth up to 15,000 baht per individual in the final seven days of last year with the aim of triggering a shopping spree. The Finance Ministry recently estimated the festive tax breaks would add 0.1 to 0.2 percentage points to GDP this year.
That estimate assumes half the 3 million taxpayers would use the tax break, generating an extra 150 billion baht in spending. This could boost GDP growth to 3% this year from an earlier forecast of 2.8%.
Amid weak exports, delays in public investment and anaemic consumption, the tourism industry was the bright spot for the economy in 2015. Foreign tourist arrivals are expected to reach almost 30 million for 2015, exceeding the official target of 28.8 million despite the deadly Erawan Shrine bombing on Aug 17.
