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Thailand Property Investment potential increases due to tax cuts

By on Sep 23, 2013 in Property News

Areepong Bhoocha-oom, permanent secretary at the Finance Ministry, has highlighted that due to tax reductions on luxury imports Thailand is on its way to competing with Hong Kong and Singapore as shopping destinations.

The Cabinet is expected to cut import duties on designer goods in a couple months, as “The government has a policy for Thailand to be a shopping destination thus taxes will be competitive with countries like Singapore and Hong Kong.

There is a widely held belief that lower customs taxes on luxury goods, will draw more foreign visitors and spur domestic spending. This move comes as the economy is facing low exports and reducing domestic spending, in addition with the world climate and delayed government projects, tourism is the only economic engine that looks promising.

The core issue is that “Thailand still subjects such goods to 30-per-cent duties. If tourists come to Thailand and can purchase all they want here, it would boost spending per tourist,” he said.

The reductions it is suggested would be submitted for approval in shortly so the benefits could be see in 2013, however the measure would need to be carefully implemented to minimise the impact on domestic businesses.

It is felt that the reductions would save the the economy in the second half. especially when combined with infrastructure spending of about Bt100, this may well deliver the targeted 4% growth this year.

The impacts of the tax reductions it is felt would enhance property returns by increasing rental income and potential capital growth.

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