The aviation gasoline tax lower was expanded once more to assist airways and tourism

A jet fuel tax cut that helped the aviation industry during the Covid-19 pandemic has been extended to the end of 2020. With international travel decimated, this tax cut is intended to help airlines stay afloat and keep more customers with lower prices while travel numbers have fallen massively.

The extension should end this month but will be extended to December 31, with the approval of the Thai cabinet, according to the director general of the excise department.

The continued reduction is welcomed, but the current problem facing domestic airlines is a huge slowdown in demand, largely due to the government's new round of restrictions and the province's additional travel restrictions and procedures.

The cabinet agreed to cut the excise tax from 4.726 baht early last year to 20 satang per liter to help troubled domestic airlines cope with Covid-19. The excise department says this tax cut is unlikely to have much of an impact on government tax revenues as it only comes to 1 billion baht a year.

The tax reduction has already been extended as it originally expired on September 30, 2020. However, it was extended to April 30th that year as Covid-19 is still devastating the tourism industry. The aim of this expansion is to reduce the financial burden on airlines in Thailand in order to keep their businesses and planes alive. The expansion is also set to help the travel industry in Thailand as a whole, as the tourism sector is essential for long-term economic recovery when the Covid-19 pandemic finally ends.

Tourism is an integral part of the Thai economy and generally contributes 16 to 17% of the gross domestic product. Prior to Covid-19, foreign tourists entering Thailand reached nearly 40 million people in 2019. However, when the global closings began in early 2020, the number of incoming tourists understandably increased. For all of last year, only 6.7 million people came to Thailand, 83% fewer than in 2019.

The government is aiming to vaccinate at least 60% of Thailand's population in order to reopen international borders by October without quarantine or restriction. Hopefully the third quarter of 2021 will see an influx of international tourists, though recent third wave outbreaks have put the timeline for the reopening on shaky ground.

SOURCE: Bangkok Post

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