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The Thai government is planning to axe luxury goods import duties to make the nation a more attractive shopping destination for foreigners, a direct challenge to Hong Kong and Singapore.
It’s a move which would almost certainly add Bangkok to the growing list of destinations now being preferred by cashed up Mainland Chinese ahead of Hong Kong, where the currency is growing stronger against the renminbi.
Thailand’s Customs Department believes removing the 30 per cent tax on luxury goods would make the country the leading tourist destination for luxury goods shopping in Asia, potentially boosting tourist spending on shopping by 15 to 20 per cent.
The argument in favour of the cut is that if Thailand’s luxury goods tax was no different from those in Hong Kong and Singapore, Thailand could become the preferred destination, because the country overall offers more attractions to tourists at a lower cost.
The cut might also encourage Thais to shop at home instead of abroad.
Foreign tourists in Thailand spend about US$33 a day on average on shopping – just half the figure tourists in Singapore spend and a quarter that spent in Hong Kong (it is not clear if those figures were calculated before the current downturn which has impacted on Chinese Mainlanders’ spending in Hong Kong).
While Thailand retail prices overall are regionally competitive, import duties on so-called luxury items and a seven per cent sales tax make luxury branded goods, and items like fragrances, are more expensive than elsewhere.
Thailand Customs Department director Kulit Sombatsiri says the department is studying the implications of the move to ensure it will not affect local businesses, and might limit the reduction to selected products that Thailand does not make.

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