BANGKOK Dec 13 Thailand's cabinet approved on
Tuesday a shopping tax incentive for consumers to spur spending
before the end of the year, as the military government tries to
lift sluggish economic growth.
Although a military coup in May 2014 ended prolonged
political unrest, the export-reliant economy has struggled to
regain traction due to weak global demand, sluggish consumption
and depressed private investment.
The junta has ramped up spending and investment projects and
unveiled various other stimulus measures in a bid to boost
momentum in Southeast Asia's second-largest economy.
The government will allow Thais a tax deduction of up to
15,000 baht ($421) on goods they buy between Dec. 14 and 31,
Kobsak Pootrakool, vice minister at the Prime Minister's Office,
The official said he expected the tax break would help boost
spending by 20 billion baht.
Last year, it offered a similar shopping tax break for the
last seven days of the year.
This year's tax rebate follows a previously announced tax
deduction for Thais on domestic travel to support the tourist
sector, which accounts for about 10 percent of the economy.
Tourism has been a rare bright spot but slowed due to
cutbacks in spending since the death of King Bhumibol on Oct.
13, and after a Thai crackdown on cheap tour packages for
Chinese tourists, Thailand's biggest source of visitors.
Private consumption makes up half of Thai GDP but has been
restrained by high household debt and falling farm income.
The finance ministry has forecast economic growth of 3.3
percent this year, up from 2.8 percent in 2015.
($1 = 35.65 baht)
($1 = 35.5700 baht)
(Reporting by Pracha Hariraksapitak and Kitiphong Thaichareon;
Writing by Orathai Sriring; Editing by Kim Coghill)