Thailand Launches Tax Incentives to Boost Local Tourism

Photo courtesy of Bangkok Post

Trang, a coastal province in southern Thailand, is being spotlighted by the government to boost domestic tourism through tax incentives. Despite its lush islands and attractions like the emerald cave, Trang has often been overshadowed by neighboring hotspots such as Phuket and Krabi. To stimulate the local economy, the government is offering tax deductions of up to 30,000 baht for Thai tourists traveling domestically from October 29 to December 15.

However, businesses in Trang have yet to see a significant influx of local visitors taking advantage of the incentive. Observers have noted that the campaign’s limited duration, combined with the country's current economic challenges and high household debt, may be preventing Thais from spending on leisure travel. Chotirot Rodmuang, marketing manager of Jaravee Tour, reported that November and December reservations have dropped by about 50% compared to last year, despite some initial inquiries.

In the first nine months of 2025, approximately 1.3 million Thai nationals visited Trang, marking a 3.8% increase year-on-year and generating 6.7 billion baht in tourism revenue. Yet, according to Kedkanok Tanaengchuan, manager of Ruarasada Hotel, the tax deduction’s limited appeal stems from many potential travelers not meeting the income requirements to benefit from tax savings. The time required for businesses to join the government’s program has also been a barrier.

The tourism drive is part of broader economic measures, including plans to acquire 60 billion baht of bad debt, aimed at supporting around 2 million borrowers, and strategies to attract more Chinese tourists. Currently, domestic tourism to second-tier provinces contributes about 13% of the nation’s tourism revenue, as per Bank of Thailand data. However, the overall economic climate could hinder the anticipated travel surge.

In the past, travel stimulus efforts like co-payment programs, which directly subsidized travel costs, were more effective than tax deductions, according to Adith Chairattananon of the Association of Thai Travel Agents. With external factors also affecting tourism, such as recent floods and regional conflicts, the outlook for the industry remains cautious.

While hotel occupancy rates in regions like Ubon Ratchathani are not expected to surpass 40% in late 2025, the tax incentives do apply to restaurants and food purchases, benefiting the dining sector. Pamiga Tangthong, a government worker, expressed plans to utilize the incentive predominantly for dining expenses.

Key Takeaways

• Trang's tourism is not seeing the expected surge despite government incentives.
• Economic factors and a brief campaign period limit travel expenditure among Thais.
• Broader economic measures include bad debt acquisition and attracting more tourists.

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  Adapted by ASEAN Now from Bangkok Post 2025-11-11