Greater Popularity Seen in 2016 Yearend Shopping Tax Breaks (Current Issue No. 2799)

KResearch is of the view that tax breaks on shopping of up to THB15,000 recently introduced by the government to stimulate consumer spending around the yearend should allow retail stores, restaurants and service businesses (that have commercial registration and can issue tax invoices) to bolster their receipts after being pressured by sagging consumer purchasing power previously.

A recent survey shows that 60 percent of the respondents find this stimulus interesting, and thus intend to purchase goods and services during the effective period, December 14-31. That figure is higher than in 2015 because the tax incentive duration has been expanded this time around. The poll also shows that 30 percent of the respondents are planning to spend THB15,000 for a tax write-off.

KResearch expects that this economic stimulus will likely add perhaps THB13 billion in cash flows to retail, restaurant and service businesses, which would be higher than in 2015. Of that total, THB12 billion may go to retail and service businesses and THB1 billion to restaurants. Those cash flows are expected to largely come from consumers with enough purchasing power to spend up to THB15,000 to gain those tax deductions.