Operators of entertainment venues and restaurants are petitioning the Thai government to temporarily suspend the 5% excise tax imposed on them, citing the economic downturn.
Their petition calls on the government to consider waiving the tax as a temporary measure and come up with a new tax structure that fits the current business climate, said Yani Loeiwanitcharoen of the Night Restaurant Business Trade Association.
The petition, submitted on Tuesday, was signed by members of six associations, including the Night Restaurant Business Trade Association, the Khao San Road Business Association, the Restaurant Association, the Craft Beer Trade Association, a Pattaya-based entertainment industry and tourism association, and the Thailand Bartenders Association.
The 5% excise tax, which applies to venues that operate past midnight, including restaurants and bars, is a huge burden to most operators who, on average, make less than 10% in profits, Ms Yani said.
As a result, the tax becomes a burden on customers, leading to even gloomier prospects for the business.
“Alcoholic beverages and other goods are already subject to a 5% excise tax, so an additional 5% tax is probably a duplication, not to mention other taxes like income tax and value-added tax,” Ms Yani added.
These taxes have added to operating costs as businesses struggle to stay afloat while being affected by the sluggish economy, she said. More businesses are on the verge of shutting down due to high costs and shrunken income.
“If businesses need to shut their doors, then unemployment would be seen on a national scale,” she said.
Thailand is starting to see signs of economic recession everywhere, said Sanga Ruangwattanakul, president of the Khao San Road Business Association, including the shutdown of large-scale businesses and worker layoffs.
These have led to lower consumption, which eventually affects restaurants and entertainment venues.
Operators are struggling to keep up with labour costs and rent, he said.
Some rely on loans to maintain their day-to-day operations, he added.
Mr Sanga said he believed the excise tax waiver would go hand in hand with the government’s economic and tourism stimulus programme and increase Thailand’s tourism competitiveness internationally.