The finance minister has confirmed his readiness to launch domestic tourism stimulus measures on Oct 29, in an effort to entice 1.15 trillion baht in domestic travel revenue and accelerate Thailand’s economic recovery.
The ministry is expected to submit a series of domestic tourism stimulus packages to the economic cabinet on Wednesday, then send them to the cabinet on Oct 21 for approval.
“The tourism measures will be enacted simultaneously with the ‘Khon La Khrueng Plus’ co-payment scheme from Oct 29 to Dec 31”, said Finance Minister Ekniti Nitithanprapas.
“Enacting both the co-payment and tourism stimulus measures at the same time will make the country’s economy more lively.”
Under the administration’s “Quick Big Win” framework, which seeks short-term results that can lead to long-term sustainable development, the domestic tourism stimulus package is expected to lift GDP, said Mr Ekniti, also a deputy prime minister.
TOURISM STIMULUS
Under the scheme, he identified three measures to quickly stimulate the local tourism industry.
First is a package for seminar-driven tourism in secondary cities. Government organisations and state-owned enterprises are entitled to a corporate income tax exemption for expenses for organising seminars for their employees in areas designated as secondary tourism provinces, or other tourism areas as prescribed by the government.
Mr Ekniti said funds for the seminar stimulus will be reallocated from an amount of 7 billion baht in fiscal 2025’s third-quarter budget.
Second, the “Thai Travel Thai” or tourism within Thailand measure allows taxpayers who travel to second-tier cities from Oct 29 to Dec 31 to deduct an undetermined amount of actual expenses for tour packages and hotel accommodation from their personal income tax filings.
The final measure is incentives for hotel renovation. All hotels reinvesting in their properties, particularly for upgrades in energy efficiency or general refurbishment, will gain tax incentives, he said.
The measure is designed to lift the hotel industry, support economic development, and encourage sustainable building practices, said Mr Ekniti.
The Finance Ministry is working to determine additional details, especially the amount of tax incentives available for deduction.
CO-PAYMENT PLUS
The Khon La Khrueng Plus co-payment scheme, with a budget of 44 billion baht, is expected to bolster GDP in the fourth quarter by at least one percentage point, he said.
The scheme provides 20 million entitlements, with the government contributing half of the spending, while individuals must contribute 44 billion baht themselves, injecting a projected 88 billion baht into the economy.
The subsidy for taxpayers increases to 2,400 baht, up from the general subsidy of 2,000 baht.
The scheme runs from Oct 29-Dec 31, and those who registered but have not used their entitlement must make their first transaction by Nov 11 to retain their eligibility.
The government also approved a top-up for 13.4 million welfare card holders of 1,700 baht each, funded by another budget allocation of 23 billion baht.
This means by year’s end, around 111 billion baht will have been mobilised to stimulate the economy, which is expected to raise GDP by 0.3-0.4 percentage points this year, said Mr Ekniti.
TOUGH DECISION
He also revealed that he took several days before deciding to accept the prime minister’s invitation to become finance minister.
“The invitation resulted in very serious consideration. I discussed it with my wife a lot, acknowledging that taking the post would completely change my lifestyle,” said Mr Ekniti.
“Eventually I decided to accept the job to further the national interest, as Thailand desperately requires economic and fiscal policy restructuring to adapt to new economic conditions, as well as to address issues such as the middle-income trap, debt crises, and the need for greater digitalisation.”
PRECARIOUS ECONOMY
He acknowledged Thailand is in a “precarious situation”, as the nation continues to deal with a high debt ratio and rising household debt.
There is a dire need for a “policy menu for financial recovery” to address the structural obstacles to economic growth and shape a vibrant recovery, said Mr Ekniti.
Furthermore, the International Monetary Fund warned of the need for prudent fiscal policies for long-term stability, while Fitch Ratings noted mounting external headwinds and political uncertainty, leading it to downgrade Thailand’s credit rating outlook to negative from stable last month.
The government is implementing reforms to attract new growth sectors, such as electric vehicles and high-tech manufacturing, aiming to revitalise the economy and address these pressures.
“A failure to make significant progress in the next five years could lead to continued economic struggles and a missed opportunity at future prosperity,” he said.
“Meanwhile, a prolonged period of stagnation could adversely fuel public discontent and social unrest.”