The Revenue Department has proposed a tax deduction for travel expenses, arguing that it could boost tourism while costing the government only Bt2 billion a year in lost revenue.
Meanwhile, the Tourism Authority of Thailand (TAT) is beefing up marketing efforts to lure Japanese tourists back to Thailand during high season, but expects 200,000 fewer visitors from that country this year than projected earlier.
Prasong Poontaneat, director-general of the Revenue Department, said a tax package aimed at stimulating tourism had been proposed to the permanent secretary of the Finance Ministry and was awaiting approval.
Under the proposal, local expenses for tour packages and hotels could be deducted from annual personal income tax to a maximum of about Bt15,000 per person. Juristic persons' travel expenses for training and seminar could be deducted at no more than two times the actual expenses without a ceiling.
Prasong expects these tax measures would shave no more than Bt2 billion off the government's annual revenue. In return, his department could gain revenue from value-added tax (VAT) from higher domestic consumption as a result of more touring, training and seminars.
Domestic consumption has started improving, reflected by higher VAT collections. August's VAT take expanded by 8.5 per cent year on year and 1.97 per cent from the previous month.
Prasong said an amendment to the Revenue Code would be proposed to prevent transfer pricing, which aims at tax avoidance. Some legal loopholes have been employed by Thai and foreign companies for transfer pricing from Thailand to other countries with lower tax rates.
The Revenue Department has also proposed an inheritance tax, the draft of which is now under review by the Council of State.
In fiscal 2014, the Revenue Department targets total tax collection at Bt1.89 trillion. By late this month, it is expected to be short of target by about Bt100 million. Next fiscal year's target is set at Bt1.965 trillion.
Prasong expressed concerns over tax revenue in September, the last month of this fiscal year, saying corporate income tax from automobile sales was estimated to be less than the target, given lower demand after the expiration of the government's first-car policy.
Tax revenue from automobile dealers and related businesses is expected to be down by about Bt14 billion to Bt15 billion this fiscal year.
In Japan meanwhile, TAT's three offices in Tokyo, Osaka and Fukuoka are preparing marketing and strategies to lure Japanese visitors to Thailand during high season. TAT and Thai travel agents are scheduled to join "JATA Tourism Expo Japan 2014" in Tokyo from September 25-28.
At the event organised by the Japan Association of Travel Agents, TAT will promote some big events set to run in the final quarter of the year such as the Loy Kratong Festival, Christmas Eve, the Bangkok Countdown to the New Year, and Thai boxing. It will host a "Thai Night" at the expo.
Sukanya Sirikanjanakul, director of TAT's Osaka office, said Japan remained one of the most important markets for Thai tourism.
This year, the authority initially targeted 1.4 million tourists from Japan, but it now looks likely it will miss that target by 200,000 visitors because of a big drop during the political chaos in Thailand in the second quarter and a recent landslide in Japan.