Govt mulls fresh tax incentives

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Govt mulls fresh tax incentives
Korn plans for rebates to revive battered tourism

Published: 29/05/2010 at 12:00 AM
Bangkok Post: Newspaper section: News



The government says a fresh tax incentive is in the pipeline as it wants to rejuvenate the tourism industry which has been devastated by the political unrest.

Finance Minister Korn Chatikavanij yesterday said he wants income tax rebates for individuals using domestic hotel accommodation as part of measures to revive tourism.

Currently, the government allows private organisations to claim meeting and conference tax rebates as part of its plan to stimulate the economy.

"We will ask the Revenue Department to study if it is possible to allow individuals to use hotel accommodation bills to claim tax refunds," said Mr Korn who delivered a speech at the opening of Bangkok Post Thailand Travel Fair 2010 yesterday.

The fair is being held by the Bangkok Post at Queen Sirikit National Convention Centre. It opened yesterday and runs until tomorrow.

It is estimated that the tourism sector alone lost between 60 billion and 80 billion baht in revenue from foreign and local tourists during the 70 days of political turmoil which claimed 88 lives, left over 1,000 injured and led to the torching of dozens of buildings and looting in several parts of the capital.

About 15% of the tourism industry workforce has faced adverse impacts from the recent riots, Mr Korn said.

The Labour Ministry earlier said about 100,000 to 200,000 workers in the industry may lose their jobs. A recent study by the University of the Thai Chamber of Commerce found, of the total losses, more than 40 billion baht was reported by inbound tourism and the remainder domestic tourism.

Mr Korn conceded yesterday the tourism industry is in crisis and that providing direct aid to those affected is not enough as long as normalcy cannot be restored.

"It is important to restore normalcy to the country otherwise we cannot bring back investors' confidence," he said.

He said Prime Minister Abhisit Vejjajiva will today meet foreign diplomats and the media to clarify the political turmoil and the government's reconciliation plans to restore confidence.

The finance minister said while the government is to provide loans to protest-hit tourist business operators, tourism promotion campaigns are also needed to encourage the Thai public to travel in the country.

Mr Korn said it is estimated the government will need about 100 billion baht to rehabilitate the economy in the aftermath of the red shirt protests.

The amounts are for those hit by the violence and those who lost business opportunities and had liquidity problems, he said.

Under the initial plan, the government has pledged to pay 50,000 baht each to small entrepreneurs and people who suffered arson attacks.

He said he had held talks with some 140 business entrepreneurs in Siam Square and found that their estimated losses ranging between hundreds of thousands of baht to tens of billions.

"The government is aware that an amount of 50,000 baht is 'small' and is discussing with insurance firms about special assistance to those affected operators," Mr Korn said.

The minister conceded it would be no easy task to get European tourists to return to Thailand. Apart from the riots which have hurt the country's tourism image very badly, the Thai baht is still appreciating due to the strong economy overall.

The government would promote long holidays as a part of the tourism campaign, he said.

PM's Secretary General Korbsak Sabhavasu yesterday promised to speed up the disbursement of 50,000 baht in aid to victims of arson attacks.

Speaking at a campaign to rehabilitate Siam Square which was also ravaged by blazes, he said the money should be disbursed within 14 days.

So far, about 3,000 operators have registered for assistance and more are expected.

Mr Korbsak said the government cannot estimate all the damage because the authorities cannot get to certain areas which are off-limits.

As for the affected tenants in the Siam Square area, Mr Korbsak said the government has earmarked a budget of 88 million baht for Chulalongkorn University to help affected tenants by providing temporary spaces for them.

He said the university, which owns and manages the property, has started work and the temporary space should be ready for the tenants in a month. The tenants will get a six-month rent waiver and during this period they will be provided with make-shift tents to operate, he said.