Tourism tax to be introduced during upcoming high season

[reader]

NOTE — This was a topic of discussion when it was first introduced last year. It’s not the 300 baht that will deter many visitors; it’s the method on how it will be collected. If it becomes part of the the digital arrivals card, then it will be viewed essentially as a visa fee. 

From The Nation

The tourism tax of 300 baht a person will come into force for foreign tourists by the end of this year, Tourism and Sports Minister Sorawong Thienthong said on Thursday.

He expects the tourism tax scheme to come into effect during Thailand’s high season later in the year, provided the scheme is endorsed via publication in the Royal Gazette in March.

Details of the scheme are not as yet clear, he said, adding that the ministry is working on linking data to the Thailand Digital Arrival Card (TDAC) to facilitate tax collection. The TDAC will come into force on May 1.Sorawong explained that foreign travellers arriving by air will be charged 300 baht/person/trip. Those who cross into the country either by land and water will also be charged 300 baht, but would be entitled to enter several times within 30-60 days, he said.

He said the ministry will summarise this issue at a later date to ensure that all foreigners using a passport to visit Thailand will be able to access life and accident insurance.

Sorawong does not expect the tourism tax scheme will cause a decline in foreign arrivals as the tax is low. Several embassies have confirmed that this scheme is a good plan as it will allow travellers to access insurance, he said.

He emphasised that the tourism tax system will be one-stop-service to facilitate travellers.

“The tourist fee may not be a large amount that would put tourists off, but if collection is complicated, it will be inconvenient. Our aim is to make the process as smooth as possible,” he said.

https://www.nationthailand.com/news/tourism/40046796

[PeterRS]

3 hours ago, reader said:

Details of the scheme are not as yet clear

And how many times have we heard this. New scheme, great idea - but sorry guys we have not yet got a clue how to implement it!!

[reader]

16 minutes ago, PeterRS said:

And how many times have we heard this. New scheme, great idea - but sorry guys we have not yet got a clue how to implement it!!

Unless it gets tacked on to air ticket, I don’t see how it can be easily accomplished. 
 

[TMax]

4 hours ago, reader said:

Our aim is to make the process as smooth as possible,” he said.

I bet it won't be as smooth as possible though.

[macaroni21]

Just about all other countries' electronic arrivals notification can be submitted a few days in advance. In fact "in advance" is the desired part, so that the immigration system knows to expect you, watch out for health risks, etc. 

If a tax is to be linked to this, then the e-arrivals system will need to be linked to an e-payment gateway, making it perhaps the world's most complicated arrivals notification system. And then the e-payment option must cater to lots of different travelers including those 3rd countries like India that do not have an easy way for their citizens to make a foreign currency remittance easily. Or the rate of commission will be very high, (15-30%) for small amounts like 300 baht.

Yet Thailand wants to attract visitors from there!

Some official has been thinking out of his ass.

[macaroni21]

I would have thought the easiest way to raise money from tourists in order to reinvest in tourism infrastructure or provide insurance would be to tax hotel accommodation when with a waiver or rebate if the hotel guest happens to be Thai national.

Of course, this needs to be supplemented either with enforcement against AirBnB rentals of under 30 days, or else change the law and allow AirBnB for less than 30 days and impose the tax on those too.

I know, I know. Thailand is famous for enacting all sorts of laws but not enforcing them.

 

[bkkmfj2648]

41 minutes ago, macaroni21 said:

this needs to be supplemented either with enforcement against AirBnB rentals of under 30 days,

But there are gazillions of AirBnB and Booking.com, and other short term rental sites, even including Facebook marketplace that are offering under 30 day illegal rentals.  I am one of these types of customers.

But even MBs (money boys) are illegal under the no prostitution is allowed laws.

 

[Keithambrose]

21 hours ago, bkkmfj2648 said:

But there are gazillions of AirBnB and Booking.com, and other short term rental sites, even including Facebook marketplace that are offering under 30 day illegal rentals.  I am one of these types of customers.

But even MBs (money boys) are illegal under the no prostitution is allowed laws.

 

Taxing money boys? How much would that raise! 

[bkkmfj2648]

10 minutes ago, Keithambrose said:

Taxing money boys? How much would that raise! 

If they brought them into the legal economy, gave them rights, healthcare, retirement pension, etc. it could have a BIG positive net impact on Thailand's economy.  Just this change alone would allow the Thai government to stop looking at us retirees as cash cows by taxing us when we transfer money into Thailand to cover our living expenses and live in Thailand for more than 180 days in a tax year.

Consequently, I asked Grok this question and this was the reply:

==================  Grok response on 28-Feb-2025 ===============================================

Legalizing prostitution in Thailand and integrating it into the formal economy could have several positive impacts on GDP and tax collection, though the outcomes hinge on effective regulation and enforcement. Here’s a breakdown based on available data and reasonable projections as of February 28, 2025.

Impact on GDP.

 

Thailand’s sex industry is already a significant economic player, albeit largely underground. Estimates vary widely due to its informal nature—figures from 2015 by Havocscope pegged it at $6.4 billion annually, while older studies (e.g., 1993-95) suggested $22.5-$27 billion, or up to 12% of GDP at the time. More recent claims on platforms like X and some analyses suggest it could still contribute 10% or more to GDP if fully formalized, though these lack precise, current substantiation. Thailand’s GDP in 2024 is around $500 billion (nominal, based on IMF projections), so even a conservative estimate of $6-10 billion from prostitution would represent 1.2-2% of GDP directly. Legalization could amplify this through:

1. Direct Economic Contribution: Formalizing the industry would shift it from the shadow economy to taxable business activity. Registered brothels, massage parlors, and independent sex workers could operate as legitimate enterprises, adding to official GDP figures. If the sector’s value is closer to $10 billion (a mid-range estimate), this alone could boost reported GDP by 2% or more.
2. Multiplier Effects: Legal sex work could stimulate related sectors—hospitality, tourism, transportation, and healthcare (e.g., mandatory health checks). Tourism, already 20% of Thailand’s economy pre-pandemic, relies partly on sex tourism; formalization might attract more visitors by reducing legal risks, potentially pushing tourism’s GDP share higher. If 10% of tourist spending (historically estimated at $4-6 billion) is linked to sex work, a 20-30% increase in such tourism could add $1-2 billion annually.
3. Rural Income Redistribution: Sex workers send an estimated $300 million yearly to rural families, per Havocscope. Legalization could increase their earnings through better wages and protections, amplifying this remittance flow and boosting rural consumption, which indirectly supports GDP.

Impact on Tax Collection

Currently, the underground status of prostitution means Bangkok collects no direct taxes from it, despite its billions in revenue. Legalization could change that significantly:

1. Income and Business Taxes: Registering sex workers and establishments would bring them under Thailand’s tax net. Assuming a formalized industry of $10 billion and applying Thailand’s corporate tax rate (20%) to businesses and personal income tax (progressive, averaging 15-20% for mid-range earners), this could generate $1.5-2 billion annually. For context, Thailand’s total tax revenue in 2023 was around $80 billion—adding $2 billion would be a 2.5% increase.
2. Licensing Fees: A regulated system could impose licensing fees on brothels and workers, akin to models in Germany or Nevada. If 100,000-300,000 sex workers (a common estimate range) paid a modest annual fee of $100-$200, plus higher fees for businesses, this could yield $50-100 million more.
3. Indirect Taxes: VAT (7% in Thailand) on related services—hotels, bars, transport—would rise with increased activity. If legalization boosts sex tourism by $1-2 billion, VAT could add $70-140 million yearly.

Broader Economic Benefits

• Reduced Corruption Costs: The illegal status fuels police bribery and inefficiencies. Legalization could redirect those funds (untaxed "payoffs") into formal channels, enhancing public revenue.
• Labor Protections: Higher, regulated wages for workers could increase their taxable income and spending power, further stimulating the economy.
• Investment Appeal: A transparent, regulated sector might attract foreign investment in tourism infrastructure, amplifying GDP growth.

Caveats and Estimates

Exact figures are speculative without current, granular data—$6.4 billion (1.5% of 2015 GDP) is outdated, and 10-12% claims seem inflated given tourism’s broader 20% share. A realistic boost might be 2-3% to GDP ($10-15 billion) and $1.5-2.5 billion in taxes, assuming robust implementation. Risks like trafficking or exploitation could offset gains if not addressed, but successful models (e.g., Germany’s $16 billion legal sex industry) suggest potential. Thailand’s context—high tourism reliance and existing sex trade scale—makes these gains plausible, though political will and enforcement capacity are key.

What do you think—would the trade-offs (e.g., social stigma, trafficking risks) outweigh these economic upsides?

 

[Keithambrose]

1 hour ago, bkkmfj2648 said:

If they brought them into the legal economy, gave them rights, healthcare, retirement pension, etc. it could have a BIG positive net impact on Thailand's economy.  Just this change alone would allow the Thai government to stop looking at us retirees as cash cows by taxing us when we transfer money into Thailand to cover our living expenses and live in Thailand for more than 180 days in a tax year.

Consequently, I asked Grok this question and this was the reply:

==================  Grok response on 28-Feb-2025 ===============================================

Legalizing prostitution in Thailand and integrating it into the formal economy could have several positive impacts on GDP and tax collection, though the outcomes hinge on effective regulation and enforcement. Here’s a breakdown based on available data and reasonable projections as of February 28, 2025.

Impact on GDP.

 

Thailand’s sex industry is already a significant economic player, albeit largely underground. Estimates vary widely due to its informal nature—figures from 2015 by Havocscope pegged it at $6.4 billion annually, while older studies (e.g., 1993-95) suggested $22.5-$27 billion, or up to 12% of GDP at the time. More recent claims on platforms like X and some analyses suggest it could still contribute 10% or more to GDP if fully formalized, though these lack precise, current substantiation. Thailand’s GDP in 2024 is around $500 billion (nominal, based on IMF projections), so even a conservative estimate of $6-10 billion from prostitution would represent 1.2-2% of GDP directly. Legalization could amplify this through:

1. Direct Economic Contribution: Formalizing the industry would shift it from the shadow economy to taxable business activity. Registered brothels, massage parlors, and independent sex workers could operate as legitimate enterprises, adding to official GDP figures. If the sector’s value is closer to $10 billion (a mid-range estimate), this alone could boost reported GDP by 2% or more.
2. Multiplier Effects: Legal sex work could stimulate related sectors—hospitality, tourism, transportation, and healthcare (e.g., mandatory health checks). Tourism, already 20% of Thailand’s economy pre-pandemic, relies partly on sex tourism; formalization might attract more visitors by reducing legal risks, potentially pushing tourism’s GDP share higher. If 10% of tourist spending (historically estimated at $4-6 billion) is linked to sex work, a 20-30% increase in such tourism could add $1-2 billion annually.
3. Rural Income Redistribution: Sex workers send an estimated $300 million yearly to rural families, per Havocscope. Legalization could increase their earnings through better wages and protections, amplifying this remittance flow and boosting rural consumption, which indirectly supports GDP.

Impact on Tax Collection

Currently, the underground status of prostitution means Bangkok collects no direct taxes from it, despite its billions in revenue. Legalization could change that significantly:

1. Income and Business Taxes: Registering sex workers and establishments would bring them under Thailand’s tax net. Assuming a formalized industry of $10 billion and applying Thailand’s corporate tax rate (20%) to businesses and personal income tax (progressive, averaging 15-20% for mid-range earners), this could generate $1.5-2 billion annually. For context, Thailand’s total tax revenue in 2023 was around $80 billion—adding $2 billion would be a 2.5% increase.
2. Licensing Fees: A regulated system could impose licensing fees on brothels and workers, akin to models in Germany or Nevada. If 100,000-300,000 sex workers (a common estimate range) paid a modest annual fee of $100-$200, plus higher fees for businesses, this could yield $50-100 million more.
3. Indirect Taxes: VAT (7% in Thailand) on related services—hotels, bars, transport—would rise with increased activity. If legalization boosts sex tourism by $1-2 billion, VAT could add $70-140 million yearly.

Broader Economic Benefits

• Reduced Corruption Costs: The illegal status fuels police bribery and inefficiencies. Legalization could redirect those funds (untaxed "payoffs") into formal channels, enhancing public revenue.
• Labor Protections: Higher, regulated wages for workers could increase their taxable income and spending power, further stimulating the economy.
• Investment Appeal: A transparent, regulated sector might attract foreign investment in tourism infrastructure, amplifying GDP growth.

Caveats and Estimates

Exact figures are speculative without current, granular data—$6.4 billion (1.5% of 2015 GDP) is outdated, and 10-12% claims seem inflated given tourism’s broader 20% share. A realistic boost might be 2-3% to GDP ($10-15 billion) and $1.5-2.5 billion in taxes, assuming robust implementation. Risks like trafficking or exploitation could offset gains if not addressed, but successful models (e.g., Germany’s $16 billion legal sex industry) suggest potential. Thailand’s context—high tourism reliance and existing sex trade scale—makes these gains plausible, though political will and enforcement capacity are key.

What do you think—would the trade-offs (e.g., social stigma, trafficking risks) outweigh these economic upsides?

 

Gosh, I didn't expect such a detailed  response! I fear the innate conservatism of the Thai people, and/or the Government,  would never allow such a change. Unless  there was money in it for the elite!

[PeterRS]

1 hour ago, Keithambrose said:

I fear the innate conservatism of the Thai people, and/or the Government,  would never allow such a change. Unless  there was money in it for the elite!

That's exactly the reponse I'd have given up until last year. But I had been saying for years that Thailand was too conservative a society to allow gay marriage. I sure got that wrong! Maybe this is an indication of quite significant changes in society as a whole. The younger generation which voted overwhelmingly for the new party run by Pita Limjaroenrat which was then disbarred by the old guard has. I think, now got the bit between its teeth for change. Assuming the party or its successor gets its act together at the next election, I certainly expect more radical changes. Legalising prostitution, though, may go a bit too far.