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King Power not happy with talk of abolishing duty-free on arrival

Duty-free on arrival at Phuket Airport - PHOTO: Flickr/Peter Robertson

The government’s proposal to abolish duty-free on arrival at Thailand’s airports has met with a lukewarm reception from Airports of Thailand.

The airports operator says removing duty-free shops on arrival would significantly impact the revenue it currently shares with King Power, Thailand’s largest duty-free retailer. King Power aren’t happy either.

PM Srettha Thavisin’s administration is introduce a host of measures aimed at boosting the economy and international tourism. Among the ideas being considered is a Finance Ministry proposal to turn Thailand into a “duty-free paradise”.

This would involve getting rid of duty-free on arrival shops at the country’s airports, but would not affect duty-free shops in the Departures area, which would remain in place. The hope being, that tourists would then spend their cash on duty-free items around the country.

Meanwhile, the Excise Department is looking at ways to reduce the price of alcohol in-country by adjusting the tax structure with a view to boosting domestic sales among foreign visitors and locals. Wines and spirits from overseas have always been very expensive in Thailand.

Lavaron Sangsnit, Finance Ministry permanent secretary, says getting rid of duty-free on arrival will encourage visitors to spend their money elsewhere.

“Eliminating duty-free shops upon entry will likely lead tourists to spend on products within the country. Simultaneously, a reduction in beverage taxes will incentivise tourists to purchase beverages locally, contributing to the circulation of money within the economy. With an appropriate tax structure for beverages, Thai citizens will find it more affordable to buy beverages domestically.”

According to a Nation Thailand report, the Finance Ministry’s proposal received initial Cabinet approval on Tuesday. The ministry now plans to meet with the Customs Department and Excise Department to review the measures further, before re-submitting them for final Cabinet approval.

Meanwhile, AOT President Kerati Kijmanawat points out that the proposal to get rid of duty-free on arrival is just that – a proposal. He adds that Cabinet has called for a review of the potential benefits before any instructions are issued to AOT.

Kerati says cancelling duty-free on arrival would have a knock-on effect on concession agreements, including revenue-sharing contracts currently in place between the airports operator and private businesses.

SOURCE: Nation Thailand

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