Govt urged to waive import duty on luxury goods

The measure was part of proposals made yesterday by Thailand 's largest retail conglomerate Central Retail Corporation (CRC), together with major suppliers, who are seeking government support to retail and related industries.

The top priority issues are raising the income of Thais, especially in the provinces, promoting exports, especially of Thai brands encouraging tourism, considering reducing import tax, especially on luxury items, encouraging consumption by boosting consumer confidence and reviewing laws and regulations that limit development and continued expansion of the retail sector.

The proposals were put before Prime Minister Abhisit Vejjajiva, who chaired the CEO forum "Riding the Storm - A Business and Government Dialogue", held yesterday by CRC for its 500 major suppliers.

An internal survey conducted among suppliers showed that about 71 per cent of Thai brands were interested in exploring new export markets. They are deeply concerned about the domestic economic situation, consumer confidence and the expansion of the local retail sector. Other concerns are political stability, the tourism situation and the global economy.

Tos Chirathivat, CEO of CRC, said the government should cut import tax on luxury products from over 30 per cent currently to zero. The measure would draw foreign tourists, particularly from Asia, he said, and promote Thailand as a shopping destination, making it more competitive with Singapore and Hong Kong.

"The elimination of import duty is the easiest way the government can promote the local tourism sector and related industries such as transportation, entertainment and restaurants. It will give the most benefit to the country," said Tos.

He said the government should also raise incomes, especially in the provinces, by decentralising plans for economic development.

Tos said that China, for instance, had concrete plans in all its provinces which had been set up with close cooperation between central and local governments, as well as the private sector.

He said raising incomes would lead to higher consumption, which would improve the local economy and society.

CRC and its suppliers have a strong network of relationships that account for a significant share of the economy.

He said CRC today served about 5 million regular customers plus another 4 million others, accounting for 14 per cent of the Thai population. The group employs 20,000 employees together with another 20,500 sales staff employed by its suppliers.

The group deals with about 6,500 suppliers, which between them account for Bt1.5 trillion in sales. About 65 per cent of them are own-brand manufacturers, 46 per cent import distributors and 26 per cent licensed manufacturers.

Abhisit said yesterday the government had set a very clear direction to effectively manage the economy in both the short and long term, which would help restructure the Thai economy to make it stronger, capable of competing in the global arena and dealing better with fluctuations in the global economy.

"We have already passed the most difficult time of the economic crisis in the second half of last year. Even though there was a 7.1-per-cent contraction in GDP in the first quarter of this year, I strongly believe the decline will be less in the second and third quarters and the Thai economy will see some positive GDP growth in the fourth quarter," he said.