Unpacking the tourism tax

While the planned levy was endorsed in 2023, the current administration is unlikely to implement it due to time constraints

- NARUMON KASEMSUK

Collection of the 300-baht tourism tax from foreign arrivals has been delayed several times as governments stall when confronted with unfavourable conditions.

While the cabinet approved the National Tourism Policy Committee’s proposal to collect a tourism tax from inbound travellers in February 2023, the programme has still not been implemented.

There have been several delays primarily driven by political decisions, rather than a lack of readiness in terms of implementation.

On his first day in office last month, the new tourism and sports minister expressed an interest in advancing the fee collection, but it now seems unlikely the tax will be collected during the four-month timeline promised by the current government.

Section 10/2 of the National Tourism Policy Act of 2019 introduced the tourist tax to fund tourism development and provide insurance for foreign visitors.

The concept draws from other examples, such as Japan’s ¥1,000 (211-baht) departure tax.

Between 2017-2019, the Thai government allocated 300-400 million baht annually to cover unpaid medical bills for foreigners treated in public hospitals, according to the previous administration.

However, the levy faced its first major setback during the pandemic, as inbound tourist arrivals dropped to 6.6 million in 2020 and 510,767 in 2021, then recovered to 11 million arrivals in 2022, creating unfavourable conditions for implementation.

On Feb 14, 2023, the Prayut Chan-o-cha government and Phiphat Ratchakitprakarn of the Bhumjaithai Party, the tourism and sports minister, approved in principle the National Tourism Policy Committee's draft for the tax.

The tax rate was set at 300 baht for arrivals by air and 150 baht for arrivals by land or sea, applying only to overnight visitors.