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UPDATE 1-Thailand to offer tax incentives to boost consumption

* Plans tax deduction of up to $960

* Expects $6.4 bln injected into economy in Q4

* Extends domestic tourism packages to end-Jan from Oct (Adds details, expected economic impact)

BANGKOK, Oct 7 (Reuters) - Thailand will offer tax incentives to spenders to boost domestic consumption and revive an economy stumbling from the impact of the coronavirus pandemic, government officials said on Wednesday.

Southeast Asia’s second-largest economy could contract by a record 7.8% this year, the central bank predicts.

The government will give a tax deduction of up to 30,000 baht ($960) on purchases of goods and services from October to December, Danucha Pichayanan, spokesman for the government’s special economic task force.

The measure, approved by the task force, is expected to cost the government 11 billion baht in lost revenue but should add 120 billion baht in the economy, said Deputy Prime Minister Supattanapong Punmeechaow.

The tax measure follows cash handouts worth 21 billion baht for low income earners and subsidies of 30 billion baht for consumers.

Altogether, there will be about 200 billion baht ($6.4 billion) injected into the economy in the last three months of this year, Supattanapong said.

“Right now, every country’s policy is the same, that is to rely on domestic consumption and investment,” he said.

The government also extends earlier measures to boost domestic tourism from October to January, he said. ($1 = 31.23 baht) (Reporting by Kitphong Thaichareon, Orathai Sriring and Satawasin Staporncharnchai; Editing by Ed Davies and Alex Richardson)

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