THAILAND is upping its game to compete with regional shopping meccas Hong Kong and Singapore by dropping the tax levied on luxury items, in the hope of encouraging spending by travellers.
According to Bloomberg, the import duties on luxury watches, clothes and cosmetics will be cut from 30 per cent to zero by the end of the year, although it will initially be reduced to between zero and five per cent for certain items.
Somchai Sujapongse, head of the finance ministry’s fiscal policy office, was reported as saying that the hasty nature of the change was to “help boost the economy this year”.
“Apart from buying luxury products, (tourists) will also buy our local products. We also hope wealthy Thai people will buy luxury items in Thailand instead of flying to Europe to make purchases.”
Areepong Bhoocha-Oom, finance permanent secretary of Thailand, said in the Bloomberg report: “The government has a policy for Thailand to be a shopping paradise. So it will reduce the tax on luxury imports to a competitive level with other (markets) like Singapore and Hong Kong.”
Thailand expects tourist arrivals to grow 18 per cent to hit 26.4 million in 2013, up from last year’s 22.4 million visitors.
