Two more years for travel perk
Domestic operators ‘will enter tax system’
The tax allowance f or travel has been extended for another two years, with retroactive effect from Jan 1, says the Revenue Department says.
The move is aimed at boosting tourism revenue to offset tepid exports.
The Revenue Department has agreed to the renewal of the tax break for domestic tour packages, hotel accommodation and tour guide service fees for two more years after it expired last month, deputy directorgeneral Somchai Saen-gratnaneedet said.
However, he said the amount of travel expenses deductable from taxable income remained under consideration.
Krisada Chinavicharana, director-general of the Fiscal Policy Office, has said the 15,000-baht tax break for travel expenses is too low.
The government offered income earners tax relief for domestic tour packages, hotel accommodation and tour guide service fees of up to 15,000 baht, effective from Dec 15, 2014, with the goal of helping domestic tourism operators hurt by the pre-coup political chaos.
Receipts issued by tourism-related operators registered under the valueadded tax system are required for such tax claims.
Amid growing uncertainty over China’s economic growth, the government has decided to stimulate the tourism industry and consumption among middle- and high-income earners as quick engines to ward off downside risks to growth since public and private investment could take time to bear fruit.
Tourism, one of the few bright spots in the lacklustre economy, now accounts for a mere 10% of GDP.
The Tourism Authority of Thailand (TAT) has revised up its domestic tourism revenue target for this year to 850 billion baht from 802 billion previously projected and raised the combined domestic and inbound tourism revenue to 2.41 trillion from 2.3 trillion predicted earlier.
Mr Somchai said reinstating the travel tax allowance would not only encourage Thais to travel within the country but also encourage travel operators to enter the formal tax system.
TAT governor Yuthasak Supasorn said the extension of the travel tax break would directly benefit the tourism sector.
The measure would be more effective if it were customised to be in line with the strategies of the Tourism and Sports Ministry and the TAT, which are focusing on promoting domestic travel, he said.
For example, tourists would be encouraged to visit provinces that are not major tourist destinations.
“We want to distribute revenue to secondary provinces and convince people to travel more on weekdays to reduce congestion during long holidays and festive seasons,” Mr Yuthasak said.
One executive with the Eastern Chapter of the Thai Hotels Association said the extended travel tax allowance would lead to more Thais travelling within the country instead of going abroad during long weekends.
“This measure will boost travel sentiment after the government announced tourism would be a major driver for the economy this year,” the executive said.