6 hours Ago
The Thai Retailers Association (TRA) wants the government to introduce an instant VAT refund scheme for tourists and set up a free-trade-zone sandbox in tourist destinations such as Phuket, with the aim of positioning Thailand as an Asean shopping hub. Nath Vongphanich, president of the TRA, said the Thai retail industry faces numerous challenges, as reflected in the ongoing decline of the Retail Business Confidence Index. This trend signals a drop in consumer spending, a slowdown in tourism growth, and an export sector constrained by tariff barriers.
Citing a report by Kasikorn Research Center (K-Research), the Thai retail sector is projected to see average growth of 3.4% in 2024-2025, dropping from 5.9% growth recorded in 2022–2023, he added.
To stimulate spending and attract more visitors, the association proposed an instant tax refund scheme, offering a 7% VAT refund to tourists. To further incentivise spending, Mr Nath suggested that the refund threshold be set above the average spending levels, encouraging tourists to spend more to qualify for the refund, an approach they believe will benefit the retail sector. The association proposed a minimum threshold of 3,000 baht per day at a single store.
He added that this scheme aligns with China's recent implementation of a 500-yuan (roughly 2,500-baht) instant tax refund in Chinese tourist cities such as Shanghai, Beijing and Guangzhou. Moreover, the association also proposed the government reduce import duties on lifestyle items, particularly in sectors such as fashion, cosmetics, leather goods, and fragrances. This initiative could start with products originating from the US, tested through a duty-free "sandbox" (free-trade zone) in popular tourist areas such as Phuket, aiming to stimulate tourist expenditure and establish Thailand as a shopping paradise in the region.
Reducing import taxes on US lifestyle products would also strengthen Thailand-US trade relations while offering Thai consumers a wider selection and better access to high-quality international lifestyle goods. "The association plans to discuss this issue with the Ministry of Finance in this year's second or third quarter," Mr Nath said. The TRA recommended the government introduce measures to address the rising influx of cheap Chinese goods into the Thai market amid the ongoing trade war and an oversupply in the Chinese market.
He said the government must inspect every imported product, and utilise advanced technology to enhance accuracy and enforcement. Moreover, the authorities must thoroughly inspect all products sold domestically to ensure compliance with Thai standards. The president of the TRA also urged authorities to enforce a 7% VAT rate on all goods imported online, effective from the first baht, removing the previous exemption for items under 1,500 baht.
This policy should be enacted as permanent legislation to ensure consistent enforcement, he added. Moreover, the association also urged authorities to amend inadequate e-commerce regulations to tackle goods being sold on cross-border e-commerce platforms. It also suggested implementing proactive measures to eliminate nominee businesses.
The TRA also asked the government to tackle the unauthorised use of production rights for goods manufactured in Thailand as a re-export base to the US..
