Thailand gears up to be a shopping paradise
THAILAND is on its way to becoming a shopping destination like Hong Kong and Singapore, with the Cabinet expected to cut import duties on designer goods in a couple of months.
"The government has a policy for Thailand to be a shopping paradise so it will reduce the tax on luxury imports to a competitive level...like Singapore and Hong Kong, which have zero tariff on luxury goods like perfumes and cosmetics," Mr Areepong Bhoocha-oom, permanent secretary at the Finance Ministry, said on Sunday.
Lower Customs taxes on luxury goods, which local shopping-mall operators have been waiting for years, could draw more foreign visitors and spur domestic spending.
The ministry's move comes as the economy braces itself for low exports and declining domestic spending. Also likely to hurt this year's growth are possible military strikes on Syria, which could push up oil prices and further dampen domestic spending.
With delays in government projects, the tourism industry, expecting 26.2 million foreign arrivals this year, is now the only promising economic engine.
"But Thailand still subjects (luxury) goods to 30-per-cent duties. If tourists come to Thailand and can purchase all they want here, it would boost spending per tourist," Mr Areepong said.
From October to March, luxury-merchandise imports surged 24 per cent on year to US$1.68 billion (S$2 billion).
The proposed reduction in import duties, initially on some items like cosmetics, perfumes and watches, would be submitted for Cabinet approval in one to two months so that it would be effective this year, he said.
More spending would push up economic growth in the second half. It would also help promote the country's tourism, which provides employment to a few million workers.
Eventually, Thailand would be a more competitive destination than other shopping oases like Singapore and Hong Kong, Mr Areepong said.
The measure would be implemented carefully to minimise the impact on domestic businesses. It would not promote spending by Thais on luxury items, as Thais with purchasing power nowadays also shop for the items abroad.
THE NATION/ASIA NEWS NETWORK