Thailand is one of Southeast Asia’s most popular tourist destinations. The kingdom announces the implementation of a tourism fee from 2022 onwards. The purpose of this is to finance initiatives relevant to tourism and change the business. The purpose of this article is to examine the new tax and how Thailand intends to use the revenues raised to modernize its tourism business, which has been severely hit by the Covid-19 outbreak.
The Tourist and Sports Ministry will begin collecting a 500-baht (about $14) tourism tax in 2022 for a “tourism reform fund.”
The fund’s creation was approved by the Centre for Economic Situation Administration last week, but the tax will only take effect after it is published in Thailand’s Royal Gazette, the country’s official journal and newspaper.
The additional 200 baht would be channeled into projects initiated by the private sector or community to reform their operations to fit with the fund’s strategic focus on high-value and sustainable tourism, according to Yuthasak Supasorn, Governor of the Tourism Authority of Thailand (TAT). The government estimates that the fund will generate 5 billion baht by 2022 if the country receives roughly 10 million foreign visitors.
The extra funds will also be used to assist the country in reshaping its tourism business from mass tourism to a high-value economic model that is environmentally conscious. It’s also intended to assist fund budget insurance for foreign visitors and other government-led development programmes rather than private-sector ones.
“The initiatives should be co-created, and the fund should be used to support enterprises with a positive economic impact. Depending on how much we want to make those projects reality, the proportion of public-private financial support may be 50:50, 60:40, or 70:30 “Supasorn stated.
The fund is expected to support projects that modernize the economy, allowing the country to move away from mass tourism and toward eco-friendly tourism. “The projects should be co-created, and the government should use the cash to encourage ventures that can generate revenue,” Supasorn said. “Because we want to focus on the quality market, the additional cost will have little influence on travelers.” We anticipate that this fund will help to fund a national tourist makeover that will result in more safe and clean destinations.”
The fund was established by the National Tourism Policy Committee earlier this year, with a proposed cost of 300 baht per tourist. The additional 200 baht will be used to fund private-sector projects, community enterprises, and social enterprises that want to change their operation to fit the fund’s strategy. The fund will also be used to budget for foreign visitor insurance and development projects that require government rather than private sector involvement.
Following the approval of the concept, the Tourism and Sports Ministry and TAT will meet with relevant authorities to discuss the formation of a fund committee and the development of criteria for determining whether projects are suitable for funding.
The fund’s goal, according to Supasorn, is to focus on long-term local economic growth rather than the financial impact of the pandemic. Tourist fees are frequent, and several popular places, like New Zealand, Mexico’s Baja California Sur, and, most recently, Venice, Italy, have implemented them.
Thailand had planned to levy a tourist tax on overseas visitors, but following the devastating effects of Covid-19, the proposal was shelved. The country’s visitor arrivals increased from 40 million in 2019 to 6.5 million in 2020. Many prominent tourist locations have been forced to reconsider how their tourism industries operate as a result of the pandemic, as Thailand appears to be doing with this new charge.
It comes at a time when Thailand is gradually reopening its borders to overseas visitors. The Phuket Sandbox programme was launched in July, and it was later expanded to other parts of Thailand.
Thailand recently loosened restrictions, even more, shortening the necessary quarantine period for both vaccinated and unvaccinated visitors. The country has completely abolished the quarantine for Bangkok and nine other famous tourist spots as of November 1st, which could increase the number of people entering the country.
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