Jet fuel tax cut extended to year-end

The government has agreed to extend excise tax reductions for jet fuel until the end of the year, a move to help mitigate the plight of airlines hard hit by Covid19 outbreaks which have almost wiped out cross-border travel and tourism.

Lavaron Sangsnit, director-general of the Excise Department, said yesterday the department — with the cabinet’s consent — has announced an extension of the reduction of such tax until Dec 31 once the extension period is scheduled to end later this month.

The cabinet approved lowering the excise tax on jet fuel to 20 satang per litre from 4.726 baht in February last year as part of urgent aid measures for domestic airline operators during the pandemic.

The reduction expired on Sept 30 last year, but it was later allowed to be extended until April 30 this year as the impact of the pandemic on the airline industry persisted.

According to Mr Lavaron, the extension of the excise tax reduction for jet fuel will not only alleviate the financial burden of airline business operators, helping enable them to continue their business but also resuscitate the overall tourism industry which is instrumental to driving economic recovery after the pandemic eases.

Mr Lavaron said the government is committed to providing Covid-19 vaccines to cover not less than 60% of the population in preparation to reopen the country for international tourists by October while it is expected that international tourist arrivals will commence from the third quarter.

The tourism sector contributes around 16-17% of GDP. In 2019, prior to the pandemic, the number of foreign tourists reached nearly 40 million, but once the spread of Covid-19 began during early 2020, the number of international tourist arrivals plummeted to 6.7 million for the whole of 2020, down 83% from the previous year.

The Excise Department earlier said the extension of the jet fuel tax cut is unlikely to affect its tax revenue collection as it contributes a mere 1 billion baht per year.