21 May 2024

The Thai Government is set to roll out a new economic stimulus package, including another phase of the Chim-Shop-Chai (Eat-Shop-Spend) program, to stimulate domestic spending and investment by businesses in a slowing economy, which is being hampered by a reduction in tourist arrivals as a result of the coronavirus outbreak in China.

The Fiscal Policy Office, the Revenue Department and the Comptroller Department have been assigned, by the Finance Ministry, to work out details of the package, to be ready for implementation in February.

Finance Minister Uttama Savanayana said today that the stimuli will include an updated version of the Chim-Shop-Chai program, and about 12.6 million people already registered will be eligible to take part.

He said, however, that it is yet to be decided whether the program will include a 1,000 baht giveaway/ per head, which depends on the economic situation and the assessments of the 3rd phase of the program, expected by the end of this month.

In addition to the 12.6 million already registered, about 170,000 retail shops, malls and department stores have joined, with 11 billion baht being spent via the Channel 1 Electronic Wallet and 17 billion baht spent via the Channel 2 Electronic Wallet.

To promote domestic tourism, Thai tourists who travel domestically can have their spending deducted from taxable income. Financial institutions will be urged to provide low-interest loans to tourism operators, to renovate their hotels, or they will be allowed to deduct their spending on renovation from their taxable revenue.

Mr. Uttama said that the most special and unprecedented stimulus measure is a tax incentive for companies investing in new machinery. These companies, he said, will be allowed to deduct up to 2.5 times their investment in new machinery, spent this year, from their taxable revenues.

The finance minister said it is hoped that the tax breaks for businesses, investing in new imported machinery, will boost domestic investment by up to 110 billion baht and increase the economic growth rate by 0.25%, at a cost of 8.6 billion baht in tax revenue.