Thai call for phase-out of import duty on luxury fashion goods

[webfact]

LUXURY TAX
Call for phase-out of import duty on luxury fashion goods
Kwanchai Rungfapaisarn
The Nation


TSCA president Wallaya Chirathivat

BANGKOK: -- The Thai Shopping Centres Association (TSCA) has proposed that the ruling junta gradually cut the import duty charged on luxury fashion brands by 5-10 percentage points annually, with the goal of becoming a duty-free country for such items within five years.

Such a move would raise Thailand's competitiveness against other major shopping destinations in the region, especially Singapore and Hong Kong, which have totally lifted the tax burden on fashion products in order to attract foreign shoppers, who prefer luxury international brands.

TSCA president Wallaya Chirathivat said such a measure would help the Kingdom become No 1 within the region in retail and tourism, which was important in light of the implementation of the Asean Economic Community (AEC) next year.

Thailand currently imposes a high import duty of between 30 per cent and 60 per cent on luxury fashion brands, she said.

"We would like the junta or the new government to gradually reduce the import duty on luxury goods by between 5-10 percentage points annually, while evaluating the responses of international shoppers.

"From my point of view, the government would be able to earn higher income from international shoppers by waiving import duty charged on luxury fashion brands, when compared with the current earnings derived from import duty," she said.

Wallaya added that besides tourism and shopping, related sectors such as hotels, restaurants and airlines would benefit from the removal of import duty.

The TSCA aims to turn Thailand into a regional shopping hub that offers "the best lifestyle shopping experience in Asean" in a bid to push for Thailand to become a world-class tourist destination and a "shopping paradise", she explained.

"We have announced a policy to support Thailand becoming a trade and tourism hub for Asean and the world, as we see AEC integration as a milestone that will help propel Thailand to become the centre that connects Asean member states. Thanks to its ideal geographical location in the heart of Asean, Thailand can thrive as an economic hub and a foremost shopping and tourist destination in the region," said the association chief.

According to the Tourism and Sports Ministry, overall income generated by the tourism industry reached Bt1.17 trillion last year, accounting for about 10 per cent of the country's gross domestic product. However, shopping contributed just 2-3 per cent of GDP, she said.

"We have a lot of foreign tourists coming into the country every year. However, we have not yet been able to stimulate them to spend more money on shopping. What we have to do is to promote Thai fashion brands to be known at the international level. We also need to attract more Asean luxury tourists into the country, as they are acknowledged as being big spenders," said Wallaya.

She added that many Asean luxury-end tourists had become "addicted" to luxury brands, but Thailand was currently losing out as it was burdened by higher import duty on luxury fashion brands compared to Singapore and Hong Kong, which both promote themselves as duty-free shopping destinations.

TSCA's members have plans to invest a substantial amount in new major projects from 2014-2016, she said, adding that these projects are positioned to be globally recognised and will be located in areas including renowned shopping streets and downtown Bangkok, paving the way for the city to become a fully fledged shopping destination for tourists.

Source: http://www.nationmultimedia.com/business/Call-for-phase-out-of-import-duty-on-luxury-fashio-30239866.html

[thenation]2014-07-31[/thenation]

[Kerryd]

The "Hub of Hubs" seeks to add another "hub" to the list: "The TSCA aims to turn Thailand into a regional shopping hub" 

 

Are the Hi-Sos tired of having to fly to Dubai and Paris in order to buy their luxury products at a discount ? 

[terryp]

build it and they will come (the malls...and the didn't come) ..........reduce tax and they will come

[Payboy]

Hubba :guitar: Hubba :guitar:

[clockman]

And Wine!

[NongKhaiKid]

I thought YL was no longer PM.

[Robby nz]

Let those who want and can afford luxury fashion goods pay the tax.

 

There would be a possibility some from other countries would come here to buy such things and increase the profits for the high end malls.

 

But profit has nothing to do with it all we want to do is help the country. right on.

[Bender]

i guess cheese, doesnt count as a luxury fashion goods

[cornishcarlos]

Depends what you do with it?

[selftaopath]

How about "just plain" allow market competition in all areas? As "usual" it seem Thais want to export but are not very willing to allow "across the board" imports...

 

Years ago I wanted to buy a musical instrument... The price/mark up was approx 600 . Why? Because of taxes. I didn't buy... 

[tomyummer]

Wine, beers, whiskeys, cheese, cars, and international schools? Anything to reduce the prices on these luxury goods is okay by me!

Sent from my SM-T705 using Thaivisa Connect Thailand mobile app

[NickyBurma]

If you can't afford it don't buy ...... But here in LOS its stick it on the card like everything else's surprises me how many Thai people are in debt theses days to be honest with you I just feel sorry for the kids who have the burden of there mother and father actions early on in life..

Sent from my S2 using Thaivisa Connect Thailand mobile app

[Guest]

One of the great mysteries to me is that Thai's do not seem to grasp that 100% of Zero ... is Zero.

 

This extends from Tuk Tuk drivers who will ask for ridiculous fares, not compromise on a fair charge, that still exceeds the Thai rate ... and (wait for it) ... then drive away empty and go past the exact building you asked to go to.  Amazing indeed!

 

Take that same mentality all the way up to property sales, ownership rules, government policy ... etc.  It does make one's head spin at times.

If Thailand "did the math" they could devise a fair and low tax that stimulated sales, in the process employed more people at a higher wage, and those higher wages stimulated more consumption, we would see the magic of the market and the multiplier effect.  At the lower tax rates, the country would generate ... net net ... much higher revenue to the general fund.

 

It is startling to me to sit with well educated Thai business people and have to inform them of the laws of supply, demand and the indirect relationship between price and consumption.  Every meeting feels like a high school lecture on Economics / Finance 101.

It gets old ... quickly ... and often I just walk away ... since it is impossible to change that mindset.

Advice:  Worry less about "face" ... and more about "growth and profit" ... it goes a long way in the rest of the world, who are poised to leave Thailand in the dust during the next SEA expansion, and relegate them to a true third world slot as an agrarian society who is a "nice place to visit, but I wouldn't want to do business there."
 

 

[Regyai]

Profit in place of posturing

 

Farang Bha tee sud

 

 

;)

[londonthai]

ow, this custom clump up for the last month on luxury goods smuggled into the country is hurting the hi-so.

so lets come up with a clever idea of duty free luxury items ion high streets, no need to travel abroad and waste money on airfare.

as the junta, and the new government, is created by, and in the interest, of hi-so, sure, they will have it. That's, what they have shutdown bangkok

[rwhoov]

30%? Big deal. How about the 430% tax on wine that makes a $3 bottle of cheap Italian wine $20 here?

[behonset]

so the rich chinese-thai can get away from paying even less to the government coffer!!

guess who is spring boarding this? the rich chinese-thai of course

[bkkjames]

Lottery ticket guy this morning quoted me 100 baht   I didn't buy cause thought they were supposed be lower price than that? So much for any hopes of updating my old clothes to luxury brands.

[Balance]

How about eliminating the immoral and regressive VAT tax on food first.  The level of greed among the rich and those who serve the rich in all countries is truly amazing. 

[pattayaorganic]

How about eliminating the immoral and regressive VAT tax on food first.  The level of greed among the rich and those who serve the rich in all countries is truly amazing. 

For those who want to bring morality into the argument, please first take an economics lesson. 

 

1) Minimum wage of 300B per day regardless of location had NEGATIVE BENEFIT for the poorest of the poor. The only way to improve the poor is to improve their productivity, commonly done with education. Learn a bit about inflation before you make moral arguments.

 

2) Tax policy. Again Economics 101. Price increases, demand decreases. How much decrease in demand per unit of increase is called "elasticity". Luxury goods by definition are highly elastic. When governments tax highly elastic products, the result is net negative benefit to the country. The government must tax lower elastic items such as energy and cigarettes in order to produce a net benefit for the country.

 

So all in all, the reduction of tax on luxury goods is a good thing for Thailand, sans moral judgement or not. 

 

Why give the business to other countries that you can retain in Thailand?

 

 

[toybits]

Why of course! Must be be part of Bring back Happiness campaign.  I am sure people at Klong Toey communities would be happy about this.

[Hardy99]

I thought YL was no longer PM.

 

Reading THAIVisa posts is Show how many jalous guys running around not clever enough to make money for can buy LV, Rolex, Benz and so on... 

 

anyway..

and again and again there is actions taken only for the elites... or the rich. Those need a pondshop to can buy the schoolbooks for the Kids are

left in the mess as (nearly) always before.. 

 

Why they not give the full tax refund to the tourists when leave the country instead of let those benefit who dont Need ?! Have enough money

to buy LV, Hermes etc., should NOT been supported by the government with tax money - the poor should get a benefit!

[FireMedic]

How about dropping the taxes on basic medical equipment and devices!!!!! This is why AEDs and defibrillators are so expensive....

[Balance]

 

How about eliminating the immoral and regressive VAT tax on food first.  The level of greed among the rich and those who serve the rich in all countries is truly amazing. 

For those who want to bring morality into the argument, please first take an economics lesson. 

 

1) Minimum wage of 300B per day regardless of location had NEGATIVE BENEFIT for the poorest of the poor. The only way to improve the poor is to improve their productivity, commonly done with education. Learn a bit about inflation before you make moral arguments.

 

2) Tax policy. Again Economics 101. Price increases, demand decreases. How much decrease in demand per unit of increase is called "elasticity". Luxury goods by definition are highly elastic. When governments tax highly elastic products, the result is net negative benefit to the country. The government must tax lower elastic items such as energy and cigarettes in order to produce a net benefit for the country.

 

So all in all, the reduction of tax on luxury goods is a good thing for Thailand, sans moral judgement or not. 

 

Why give the business to other countries that you can retain in Thailand?

 

 

 

 

So, you want to make it cheaper for those earning 200,000 B a month to by a Rolex, but not make it any cheaper for a family making 8,000 B a month to buy healthy food.  A country's economic policies are implemented through tax policy.  This is where morality interfaces with economics because public policies in a Democracy has to reflect the welfare of all of the people, but most especially those people at the bottom of the social/economic ladder.  If not, then you are left with only with very rich and very poor, which is unsustainable economically in addition to being immoral.
 

[Inepto Cracy]

No import duties on all medical supplies and machines, AED and insulin pumps etc.

[Bernard Flint]

I thought YL was no longer PM.

 

 

this is For Yunglik

[atsiii]

You get hit with 100% or more if you try to import an electric tuk tuk, or solar panels, or good, reliable power tools; things that can actually help and make a difference.  But all they want to do is make it cheaper for the wealthy and elite to buy their high fashion crap.  Good grief.

[TimCM]

So it is not about making Thai's happy.

 

Its about making the right Thai's happy. 

 

Now I understand the need for this reform 

[Baerboxer]

The "Hub of Hubs" seeks to add another "hub" to the list: "The TSCA aims to turn Thailand into a regional shopping hub" 

 

Are the Hi-Sos tired of having to fly to Dubai and Paris in order to buy their luxury products at a discount ? 

 

Maybe not tired. But customs are targeting people bringing lots of luxury goods in now that are way above the duty free limits. And Thai have probably stopped or at least reduced all those free upgrades and first class flights.

 

You can't expect the HiSos to have to miss out, bless'em. They need their perks and all those expensive luxury products to show everyone what important well heeled people they are.

 

You'll be wanting the laws to apply to them next.

[SureNDT]

The Thais have their priorities right as usual.

 

I'm sick of having to board a plane whenever I want to buy the missus a new LV bag. 

 

Let's hope the junta implement this fantastic new rule.