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VAT refund for tourists increased to B30,000

The Revenue Department is set to raise the ceiling for value-added tax (VAT) refunds for tourists at downtown agents to 30,000 baht per traveller from 12,000 baht at present.

The tax-collecting agency plans to expand cash payment services for VAT refunds to tourists at 10 international airports nationwide instead of just Suvarnabhumi and Don Mueang airports, Pinsai Suraswadi, principal adviser on strategic tax administration, said without revealing when the new rules would be applied.

The additional eight airports are Chiang Mai, Chiang Rai, Phuket, Hat Yai, Krabi, Samui, U-tapao and Surat Thani.

The Revenue Department will also soon allow foreign tourists to claim VAT refunds by cash at downtown agents across the country, Mr Pinsai said.

The amended regulations will comply with economic ministers’ intention to provide more convenience for foreign visitors.

Ekniti Nitithanprapas, the director-general of the Revenue Department, said recently that the department might open applications for permanent downtown VAT refund agents after satisfactory outcomes during a trial run, with 10% higher sales from VAT-free shops to tourists.

During the one-year trial, which ended last month, each of the five agents (which include Counter Service, VAT Refund Centre Thailand and Thai VAT Refund) was allowed to open up to five locations in Bangkok for the service.

Chinese, Singaporean and Taiwanese tourists were found to be the top three nationalities using downtown VAT refund services.

Claimants must depart from Suvarnabhumi or Don Mueang airports within 14 days of the downtown VAT refund claim. Goods must be taken out of the country within 60 days of the date of purchase.

Before the trial run for VAT refund agents, some 2 million foreign tourists reclaimed sales tax of 2-3 billion baht a year.

To be eligible to claim a VAT refund, foreign tourists must spend at least 2,000 baht per store per day and are required to present expensive items such as watches, pens, smartphones, jewellery, bags, belts and laptops to revenue officials after clearing immigration to ensure that these products are taken out of Thailand.

Mr Pinsai said claimants who buy goods in Thailand worth up to 5,000 baht will no longer have to show the purchased products at customs checkpoint in airports.

“The cash payment for VAT refunds at downtown agents not only facilitates convenience for tourists but also boosts the tourism sector, as they are expected to use money incurred from VAT refunds to purchase additional goods and this will result in a multiplier effect in the economic system,” Mr Pinsai said.

The Revenue Department will adopt blockchain technology for online VAT refunds to tourists, he said, adding that the service will send refunds to travellers within three business days.

With blockchain technology, there will be no need for cash when departing from Thailand, and paper use is expected to be cut by up to 10 million pages each year.