The Excise Department has recently announced a reduction in tax rates for alcohol and nightlife establishments, effective immediately, in a bid to boost tourism and local spending. Director-general Ekniti Nitithanprapas highlighted that these tax changes, approved by the cabinet on Jan 2, aim to establish Thailand as a top tourist destination by making dining experiences more attractive to both local and international visitors through competitive pricing strategies.
The adjustments include lowering the ad valorem tax rate for grape wine and sparkling grape wine from 10% to 5%, as well as revising the tax rates for fruit wines and local liquors to encourage lower prices and increased consumer participation. The tax relief extension to night-time entertainment venues, with the ad valorem tax rate slashed from 10% to 5%, is anticipated to drive higher foot traffic and spending until the end of the year.
While these tax reductions are intended to make alcoholic beverages more accessible, especially for tourists, they also serve as a temporary measure to assist businesses affected by the pandemic and reinvigorate local job opportunities.
However, adviser Thanakorn Kuptajitti of the Thai Alcohol Beverage Business Association expressed concerns, pointing out that the current changes primarily benefit specific alcohol producers, neglecting a broader range of popular beverages like whisky, brandy, and beer. He suggested lifting the existing alcohol sales suspension between 2pm and 5pm, as this could have a more substantial impact on tourism and local businesses by addressing customer needs and operational challenges faced by eateries.
In summary, while the recent tax modifications aim to stimulate alcohol-related tourism and expenditure in the short term, there are calls for more extensive reforms to have a more profound effect on the industry and consumer behaviors.
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