Thailand eyes $30 departure tax for tourists in revenue push

Thailand is looking to travelers for more revenue, testing a tourism industry that has yet to fully recover from the pandemic.

Prime Minister Anutin Charnvirakul’s government is considering an outbound tax of about 1,000 baht ($30) on Thai and foreign travelers leaving the country, while separately planning a 450-baht fee for foreign visitors arriving by air.

The measures highlight a difficult trade-off for an economy already struggling with subdued domestic demand and sluggish growth. Thailand needs to raise more revenue after years of budget deficits of about 3%-4% of gross domestic product have eroded its fiscal space. But tourism is a major source of jobs, spending and foreign-currency earnings.

The Thai Travel Agents Association warned the outbound tax could sharply reduce passenger numbers, prompting airlines to cut flight frequencies and ultimately hurting inbound tourism. Such an outcome would also run counter to the government’s ambition to turn Thailand into a regional aviation hub, the group said.

Thailand welcomed about 24 million foreign tourists through Oct. 10, down 4% from a year earlier and still well below the nearly 40 million recorded in 2019 before the pandemic. The Tourism Authority of Thailand expects about 33 million visitors this year. A total below last year’s 32.97 million would mark the first back-to-back annual decline outside the pandemic since at least 1995.

The proposed departure tax would revive a levy last set at 500 baht about two decades ago, said Finance Ministry Permanent Secretary Lavaron Sangsnit. Existing law allows the government to charge as much as 5,000 baht, though Lavaron said the rate under consideration is around 1,000 baht.

The tax could be incorporated into airline tickets rather than collected separately at departure, Lavaron said. He argued that people who can afford to travel overseas have greater ability to bear the additional cost, with proceeds potentially used to promote domestic tourism and fund travel insurance or emergency medical coverage.

The government also plans to charge foreign visitors arriving by air 450 baht, according to Tourism and Sports Minister Surasak Phancharoenworakul. More than 80% of respondents supported the proposal in a recent online public consultation, he said.