Thailand has long been a gem in Southeast Asian tourism, attracting millions of tourists each year. With long white sand beaches, clear blue water, ancient temples containing many mysterious stories, and a rich cuisine with typical spicy dishes, the land of golden temples always has a strong attraction. However, the Thai tourism picture is about to change significantly when the government of this country decided to apply a travel tax. This decision is expected to have a significant impact on the travel experience of tourists.
Thailand's Tourism and Sports Minister Sorawong Thienthong has announced a plan to levy a new tax on tourists called a “travel tax” that will be submitted to the Thai Cabinet for approval in the first quarter of 2025.
Thailand's Ministry of Tourism and Sports has made a remarkable decision by deciding to rename the "landing fee" to "travel tax".
The Kha Yeap Pan Din (Thai Landing Fee), also known as the “landing fee,” was approved in principle by the Cabinet under former Prime Minister Prayut Chan-o-cha in February 2023 as a measure to help Thailand’s economy recover from the COVID-19 pandemic. The bill aims to levy a 300 baht (US$8.88) tax on foreigners arriving by air and a 150 baht (US$4.44) tax on those arriving by land or sea.
The land of a million elephants is a famous tourist destination around the world.
The proceeds will be used to help develop new tourist destinations and upgrade infrastructure for public services. After the policy was scrapped in June this year under the leadership of former Prime Minister Srettha Thavisin, the current government under Prime Minister Paetongtarn Shinawatra is determined to revive the scheme, under the new name “travel tax”.
Mr. Sorawong said that after being approved, the tourist tax will take effect in 6 months, or around mid-2025. In the first stage, the tax will be applied to tourists arriving in Thailand by air.
This change is not simply a linguistic adjustment but also represents a strategic move.
The Ministry of Tourism notes that air travelers account for about 70% of international arrivals to Thailand, making air travel the primary focus of the new tax. Some of the proceeds will be used to purchase insurance for foreigners, while the rest will be added to the tourism development fund, which will support improvements to tourist attractions, including the construction of facilities for the disabled and toilets for tourists.
Mr Sorawong said the Tourism Ministry is also developing an application to collect the tax, which will be linked to Krungthai Bank's system. The current insurance amount will remain the same, no more than 60 baht compared to the 300 baht travel tax per person.
The proceeds will be used to help develop new tourist destinations and upgrade infrastructure for public services.
Insurance coverage for death is capped at 1 million baht, and a maximum of 500,000 baht for injuries. This amount is in addition to the insurance coverage foreign tourists buy themselves. Insurance under the new tourist tax will cover stays in Thailand of no more than 30 days, which applies to about 87 percent of foreign arrivals, Mr. Thienthong said.
After the first phase, the Cabinet may consider adjusting taxes on passengers arriving by land and sea to the same level as those arriving by air to avoid accusations of unequal treatment.
The proposed tourism tax is in line with the global trend of funding tourism infrastructure and services.
However, the tourist tax will not apply to cross-border traders, who will need to present a border pass when travelling between neighbouring countries.
The proposed tourism tax is in line with the global trend of funding tourism infrastructure and services. For Thailand, a country that welcomed about 40 million international visitors annually before the pandemic, the new tax is expected to provide essential funding for tourism-related projects without relying heavily on the national budget.
Thailand's proposed tourism tax could set a precedent for other Southeast Asian countries and popular tourist destinations around the world, especially as tourism recovers from the pandemic.
