Worawoot Ounjai, the new president of the Thai Retailers Association, outlines the association’s mission to promote shopping tourism in Thailand at a press conference yesterday.
Worawoot Ounjai, the new president of the Thai Retailers Association, outlines the association’s mission to promote shopping tourism in Thailand at a press conference yesterday.

Greater transparency urged in airport duty-free concession

Corporate September 05, 2018 01:00

By Kwanchai Rungfapaisarn
The Nation

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The government sector must ensure transparency and fairness in framing the terms of reference for the airport duty-free concession, which is due this year, the Thai Retailers Association (TRA) said yesterday.

The TRA’s new president, Worawoot Ounjai, also said the association wanted to see an increase in the concession fee, which would boost the revenue of Airports of Thailand.

Worawoot said that every country in Asean was attempting to stimulate the domestic retail market with tourism policies that pushed consumption. He pointed to Malaysia’s “Truly Asia” campaign as well as the “Wonderful Indonesia”, “It’s more fun in the Philippines” and “Vietnam Timeless Charm” campaigns. 

This resulted in retail growth of between 8 and 12 per cent in those countries, while “Amazing Thailand” was able to achieve only 3.8 per cent growth.

If the state sector wishes to stimulate sustainable growth in the economy, there should be measures to support tourist spending and increase the competitive potential by drawing tourists from around the world to visit Thailand. There must be a strategy to make Thailand a destination for both tourism and shopping, he said. 

“Generally, many duty-free operators around the world pay between 35 to 40 per cent as concession fee, while in Thailand, the concession fees for the airport duty free are at only between 15 per cent and 19 per cent. We would like the concession fee to be about 30 per cent or more,” said Worawoot.

Worawoot had earlier in the year called for a study of appropriate methods for granting duty-free concessions in Thailand to make the process transparent, efficient and of greatest benefit to the state and the people. He said Thailand had a great opportunity to pump up its income from tourist retail – a Bt270-billion increase in revenue per year would boost the government’s coffers by Bt32 billion per year. 

Worawoot said as the new TRA president he would continue the policy of the previous board of promoting Thailand as a shopping paradise. He called for many important measures by the government, especially on VAT refund for tourists.

“We currently have VAT-free stores, but they are not full-fledged. Retail stores in Thailand have been defined as stores offering VAT Refunds for Tourists, for which consumers must submit documents to request a VAT refund at a service counter at the airport. When they get the refund, most tourists do not spend much at the airport, as they only have a little shopping time left. 

“If we wish to make it convenient for tourists to shop, we could specify that participating stores be VAT-free shops, by specifying stores to sell products whose price excludes VAT. If the sale price includes VAT, tourists should be able to request an immediate refund on the day of purchase at the point of sale,” he said.

“The government sector must promote free operation of downtown duty- and tax-free shops, especially in provinces with high tourism potential. They should allow tourists to shop in these stores and show just the documents according to the regulations of the Customs Department at a counter in the airport, just as in many countries in Europe,” he said. Incentives for tourists to visit and shop in Thailand could make Thailand a destination on par with Hong Kong or Singapore, he added. 

At present, the consumer retail market in Thailand is worth about Bt3.6 trillion as of 2017 or about US$1 billion – modern chain stores account for 32 per cent of the consumer retail value; upcountry retailers account for 12 to 15 per cent of retail consumption; and mom and pop grocery stores account for 53 to 55 per cent.