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Thailand reduces the wine import tax to boost the tourism and hospitality sector.

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In a move aimed at invigorating the tourism and hospitality industry, Thailand has announced significant reductions in import taxes on alcoholic beverages, particularly wine. The new bill, unveiled on January 2, 2024, is poised to profoundly impact businesses, especially those involved in importing and selling alcohol, such as restaurants and bars across the country.

The Thai Cabinet’s approval of tax cuts on alcoholic beverages underscores a strategic effort to stimulate retail activity and on-premise sales, mainly targeting tourists. One of the bill’s key provisions is the substantial reduction in excise taxes on wine, with the rate plummeting from 10% to a mere 5%. Additionally, import tariffs on wines, currently imposing hefty fees of 54% to 60% of the declared value, will be indefinitely exempted.

This move is expected to usher in a significant drop in wine prices, making them more accessible to consumers and tourists alike. Notably, the tax reduction extends beyond wine, encompassing spirits as well, with the excise tax on spirits set to be eliminated, offering a boon to small-scale producers.

The restructuring of excise taxes isn’t limited to wine alone. The tax structure, divided into two tiers, will offer relief across various price points. For wines priced above 1,000 baht, the excise tax will be reduced to 10%, while a zero rate will apply to wines priced below this threshold. Moreover, the excise tax calculation based on volume and alcohol content will witness a reduction, with the tax rate per litre dropping from 1,500 THB to 1,000 THB.

This move is particularly welcome in the wake of recent extensions in opening hours for entertainment venues, granting establishments an additional two hours of operation until 4 am in key tourist destinations like Bangkok. The reduction in excise tax for entertainment venues, now halved to 5% of gross revenue, further underscores the government’s commitment to revitalising the tourism and hospitality sector.

Mr Chai, a spokesperson for the government, has indicated that these tax measures are expected to be implemented shortly, pending the publication of a ministerial regulation in the Royal Gazette. The exact date of implementation is yet to be confirmed, but it is crucial to note that these tax cuts, while offering a significant opportunity, are slated to expire at the end of the year, underlining the temporary nature of these incentives and emphasising the need for businesses to act swiftly to reap the benefits.

Overall, the reduction in wine import taxes represents a concerted effort by the Thai government to bolster tourism and support businesses in the hospitality sector. By making alcoholic beverages more affordable and accessible, authorities hope to attract more tourists and stimulate economic activity in the country. For restaurants, bars, and other establishments involved in the sale of alcohol, these tax cuts offer a promising opportunity to not only enhance profitability but also to potentially expand their customer base, ultimately contributing to the vibrancy and growth of Thailand’s tourism industry.

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