Thailand eyes US$30 departure tax for tourists in revenue push

Travellers are seen at an airport in Thailand as the government considers a proposed outbound tax that the Thai Travel Agents Association warns could reduce passenger numbers and hurt inbound tourism. (EPA Images pic) BANGKOK: Thailand is looking to travellers for more revenue, testing a tourism industry that has yet to fully recover from the pandemic.

Prime Minister Anutin Charnvirakul’s government is considering an outbound tax of about ฿1,000 (US$30) on Thai and foreign travellers leaving the country, while separately planning a ฿450 fee for foreign visitors arriving by air.

The measures highlight a difficult trade-off for an economy already struggling with subdued domestic demand and sluggish growth.

Thailand needs to raise more revenue after years of budget deficits of about 3%-4% of gross domestic product have eroded its fiscal space.

However, tourism is a major source of jobs, spending and foreign-currency earnings.

The Thai Travel Agents Association warned the outbound tax could sharply reduce passenger numbers, prompting airlines to cut flight frequencies and ultimately hurting inbound tourism.

"Such an outcome would also run counter to the government’s ambition to turn Thailand into a regional aviation hub," the group said.

Thailand welcomed about 24 million foreign tourists through Oct 10, down 4% from a year earlier and still well below the nearly 40 million recorded in 2019 before the pandemic.

The Tourism Authority of Thailand expects about 33 million visitors this year.

A total below last year’s 32.97 million would mark the first back-to-back annual decline outside the pandemic since at least 1995.

"The proposed departure tax would revive a levy last set at ฿500 about two decades ago," said finance ministry permanent secretary Lavaron Sangsnit.

Existing law allows the government to charge as much as ฿5,000, though Lavaron said the rate under consideration is around ฿1,000.

"The tax could be incorporated into airline tickets rather than collected separately at departure," Lavaron said.

He argued that people who can afford to travel overseas have greater ability to bear the additional cost, with proceeds potentially used to promote domestic tourism and fund travel insurance or emergency medical coverage.

The government also plans to charge foreign visitors arriving by air ฿450, according to tourism and sports minister Surasak Phancharoenworakul.

"More than 80% of respondents supported the proposal in a recent online public consultation," he said.