Srettha Thavsin, the Prime Minister of Thailand, announced during a visit to Chang Mai on 08 June 2024 that the Kingdom has formally revoked plans to impose a tourist tax on all foreign visitors.
As reported by Kompas.com, the Thai Parliament’s February 2023 proposal to impose a tax on foreign tourist visitors precipitated widespread protest, eventually causing the current Thai government to abandon the idea.
The unpopular proposal stipulated that foreigners arriving by land must pay a tax of 150 Baht (Rp. 67,000) or 300 Baht (Rp. 134,000) if arriving by air. The new tax was initially planned to take effect beginning in June 2023 but was postponed until September 2023. Following the Prime Minister’s latest pronouncement plans to impose a tourist tax have now been abandoned.
In 2023, Thailand welcomed more than 28 million international tourists, more than twice the 11.67 million foreign tourists who visited Indonesia in 2023.
The now-abandoned Thai Tourism Tax was projected to generate 3,9 billion Baht or Rp 1.7 trillion annually. The Thai government originally intended to use tax revenues to develop tourism areas and provide insurance coverage for tourist visitors.
Those opposed to the new tax feared its implementation would negatively impact the tourism sector and discourage visitors from visiting Bali. In turn, opponents expressed further fear that tax revenues generated by Thai tourism businesses would also similarly decline.
Indonesian Tourism Tax
Meanwhile, neighboring Bali introduced a Rp. 150,000 tax on foreign visitors is effective 14 February 2024. Although plagued by an ineffective collection mechanism, the Bali tax on foreign visitors has the projected potential of generating Rp. 75 billion from 500,000 foreign monthly visitors. Despite problematic collection methods, Bali has managed to collect Rp. 61.4 billion from foreign visitors during the first two months of the new tax program.
Bali Provincial Regulation No. 2/2024 requires all foreign tourist visitors to Bali to Pay 150,000 before entering the Island.
While tourism circles in Thailand rejected and protested the proposed new tax on foreign tourists, the corresponding tax in Bali received general support from tourism circles, the media, and the Bali Tourism Board.
Some in Bali saw the tourism tax as a means of reducing tourism visitor numbers and the ill effects of overtourism. News coverage in Bali frequently reports how some foreign tourists commit petty crimes and display outrageous behavior, disturbing the local peace. In terms of poor behavior by tourists, Bali suffers from overtourism, as is the case in some areas of Thailand, including Bangkok, Pattaya, and Phuket.
In 2023, 5.3 million foreign tourists visited Bali, more than twice the 2.2 million foreigners who came in 2022. Thailand experienced a 250% increase in visitors in 2023 compared to 2022.
Bali experienced unprecedented traffic gridlock during the first part of 2023. Traffic congestion in Bali is also linked to dramatic increases in domestic tourist visitors, many of whom bring private vehicles from Java and other islands in the Republic.
At Maya Bay in Thailand, an average of more than 5,000 tourist visitors per day are blamed for environmental degradation, which required the beach to be closed for two months to repair damage to the ecosystem. In Bangkok, police estimate that tourism arrivals numbering 300,000 each day are the root cause of widespread traffic jams.
Increasingly, some governments are using tourism taxes to help counter the effects of overtourism. Tax measures are now used in Holland, Germany, Greece, Japan, and Italy. Since April 2023, the famous canal city of Venice, Italy, has limited the number of tourists allowed to enter the city, with those allowed entry required to pay five Euros.
Authorities imposing the “tourism taxes” defend their actions, claiming the funds are needed to preserve, protect, and repair tourism objects damaged by overtourism. Bali is also overwhelmed by problems connected with waste disposal, with estimates that tourist visitors generate 13% of all trash found on the Island.
Bad behavior by tourist visitors in Bali is also linked to the sudden increase in deportations, which totaled 340 in 2023, while only 188 foreigners were deported from the Island in 2022.
The inexpert introduction of the tourism tax in Bali in February 2024 apparently did little to deter tourists. March foreign tourist arrivals to Bali totaled 469,000—substantially more than the 420,000 foreign tourists who landed in March 2022.
What to do with Tax Revenues?
While initially championed as a source of funds to preserve and protect Bali’s culture and environment, many quarters continue to debate how exactly to use and adequately account for the new Bali Tourism Tax’s proceeds.
Related Links
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How & Where to Pay Bali’s New Tourist Tax?
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Bali to Charge Rp. 150,000 Entrance Tax
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Bali to Limit Number of Foreign Tourists?
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