Thailand to lower alcohol and entertainment tax to improve tourism

Thailand is making strategic moves to enhance its tourism sector, with the cabinet recently approving tax cuts on alcoholic beverages and entertainment venues. The decision aims to attract more tourists and boost the country’s economy.

The approved measures involve significant reductions in taxes on alcoholic beverages. Specifically, the government will slash taxes on wine from 10% to 5%. Furthermore, they will eliminate taxes on spirits entirely, dropping from 10%. In addition, the government will halve excise tax on entertainment venues, going from 10% to 5%. Government spokesperson Chai Wacharonke announced that these tax adjustments will remain in effect until the end of the current year.

Thai government entices more tourists with tax incentives

This tax initiative follows Thailand’s earlier move to extend the operating hours of entertainment venues until 4 am. This will cater to nighttime revelers and further entice tourists to visit the country. In November, the government also implemented a visa waiver for travelers from India and Taiwan. This waiver allows them to stay in Thailand for up to 30 days. India has emerged as Thailand’s fourth-largest source of tourism, with approximately 1.2 million arrivals this year, trailing only Malaysia, China, and South Korea. The government anticipates more arrivals with these tax initiatives.

Government data from January to October 29 indicates that Thailand welcomed a total of 22 million visitors. This contributed a substantial 927.5 billion baht (approximately $25.67 billion) to the economy. The visa waiver for Indian and Taiwanese travelers aligns with Thailand’s broader strategy to rejuvenate its vital tourism sector.

The recent tax cut announcement is part of a comprehensive plan to offset potential revenue losses. Finance Ministry Permanent Secretary Lavaron Sangsnit emphasized that the additional tourist receipts are expected to balance out any reduction in tax revenue. Tourism remains a key driver of Thailand’s economy. The government aims to surpass last year’s achievement by targeting more than 34 million tourist arrivals in 2024.

In 2023, Malaysia had the most tourist arrivals between all the countries in the Southeast Asian region.