THE Thai government will halt duty-free business operations in international airports in a bid to boost domestic sales, projecting sales up to 3.5 million baht (RM452,110) a year.
The Bangkok Post reported all three operators of the country’s inbound duty-free businesses have agreed with the cabinet’s decision to halt operations at eight international airports, according to deputy government spokesperson Rudklao Intawong Suwankiri.
The operators have submitted their letters of agreement in line with the government’s policy until it is revoked, she said.
However, Rudklao did not disclose when the closure will take place.
According to the spokesperson, the country’s Finance Ministry on Tuesday proposed guidelines to promote the country as a “tourism and spending hub” which include abolishing tax benefits for “bonded warehouses” in connection to inbound duty-free businesses, as quoted.
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The Finance Ministry will also research the “appropriateness”, as quoted, in revoking permits from bonded warehouses serving inbound duty-free businesses together with scraopping tax exemptions for duty-free items purchased by travellers.
Besides that, the ministry predicts the purchases of local goods by foreign travellers to increase by 570 baht (RM73) for each individual per trip.
Furthermore, the Customs Department amounted the sales from inbound duty-free shops to 3.02 billion baht (RM390 million) in 2023.
Rudklao added that tourists purchasing from duty-free shops will “reduce their opportunity” to spend on local products hence the move is to promote the consumption of local goods, “redirecting spending and increasing overall economic value”, as quoted.
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The closure of duty-free shops is expected to also result in new cash flow, at most estimating 3.46 billion baht (RM446 million) per year in the retail sector and tourism industry.
Rudklao mentioned the initiative would positively impact production, investment and employment in Thailand thus increasing government tax revenue.
