Transcript of the above video: 

As the title of this video suggests, we are discussing; we have seen this continuously proposed. There was the Tourist Tax; now they're trying to go for the Exit Tax. I was talking, I think it was a comment I made back to somebody on a prior video, I think it was the one pertaining to DTV, and Digital Nomads and legitimate folks in Thailand or whatever, and there's this constant refrain from the foreign community that tourism is like the life blood of Thailand. It's an important segment of the economy, but it's not the only segment of the economy. A lot of foreigners seem to treat Thailand like it is some Caribbean Nation or something, that if tourism wasn't here, the whole place would collapse. I was here during COVID; I did the videos at the time when tourism was literally decimated, literally decimated. It went from 18% of the overall GDP year-on-year, down to 1.8%. So it literally was 1/10th of what it had been. The country rattled on. I mean it soldiered on; it didn't rattle on. I mean on we went, but no, it was not the most fun time, especially for folks in the tourism sector and there was a lot less cash money sloshing around the streets. It was palpable. You could feel it. There was very little liquidity running around - what we would call velocity of money was much slower during that time period - but Thailand's overall economy, look, Thailand is an industrializing nation. There is heavy and light industry here; the infrastructure is growing. We have the Eastern Economic Corridor; there's all sorts of trade. This whole notion that Thailand is wholly dependent on tourism is not correct. However, it is a Golden Goose. It's a goose that lays golden eggs in the sense that it's a segment of the economy that from top to bottom, people in this country benefit from it. And what I mean to say is there are folks at the high end of the tourism sector that own things like hotels and hotel chains that benefit directly from tourism, as well as the vendor on a beach who makes money selling mango and sticky rice or whatever, off the tourists that come there, okay. I mean nobody here downplays tourism as part of the economy, but again the foreign community I think seems to overplay its importance or overestimate its importance in real terms. That said, again it is a segment of the economy that I think should always be respected, and it's why I don't think that any of these Tourism Taxes or Exit Taxes are particularly good ideas in a more broad sense of things. 

Before I jump into the article I'm going to cite here, just to point out real quick, my better half and I set up a restaurant here in downtown Bangkok. For folks who watch these videos and don't necessarily need to avail themselves of our firm but you maybe want to support us or something, we'd really appreciate, we'd love to see you. Our restaurant is Pancake Palace, again as the name implies it is breakfast any time. Its American style diner style breakfast but we also have an English breakfast on the menu. We've also got American Diner style food. It's not just breakfast anytime, it's American Diner style food anytime: we've got hamburgers, cheeseburgers, chilli bowls, grilled cheese sandwiches, tacos; we have even got Coke in glass bottles. If you're interested, the link is in the description below. 

That said, back to the main point of this video. I thought of making this video after reading a recent article in the Bangkok Post, bangkokpost.com, the article is titled: Travel agents slam B1,000 exit tax. Yeah, I imagine they would, because they have continued to try to throw this Tourist Tax on. I remember talking about this even in COVID. They were trying, different Governments were trying to slide this in. It's bad optics. I just don't think it's a great idea. Now as we will get into in the citation, I see where the bureaucrats are sort of, their mouths are watering at the notion that every person that leaves Thailand - including Thais by the way are supposed to be included in this - which I as a Thai and many other Thais I think resent that for a variety different reasons. But they keep trying to throw this in because their mouths are watering at the notion of all the money that can be accrued from it, but these folks aren't looking at the broader ramifications of the impact this can have in a negative manner on a segment of the economy that can be more precarious than I think people, than I think policy makers, especially you sort of bureaucratic type policymakers that want this tax, really take into account. That said, quoting directly: "The Thai Travel Agents Association (TTAA) strongly opposes the Government's plan to levy a 1,000-baht baht Departure Tax on Thai travellers, warning it will hamper two-way tourism and hurt the economy during a cost-of-living crisis." Yeah, this is not the time that we need the Government bearing down with a bunch of taxes. And by the way, going back even into COVID, this is the same bunch of government bureaucrat people that shut down our economy for years on end and then they turn around and say "oh well we are having shortfalls in government revenue." Well okay, we're having short falls in private sector revenue now because of this energy issue coming off of the Middle East situation, just like we had private sector revenue shortfalls because you shut us all down. This is not the time for overbearing Government taxation overreach. It's a time for the Government to maybe step aside, let the private sector do what it does best, which is innovate, create value and productivity so that we can all get on down the road in a free enterprise system, which was what I thought we were all trying to do here. 

That said, quoting further: "Chotechuang Soorangura, Vice President of TTAA, said the goal to raise more revenue was understandable, but the principle behind the scheme was unacceptable. He said it remains unclear how much of the budget will be allocated to each type of stimulus, undermining transparency in how the fund will be managed." Well first of all, I love this where it's like “oh, we are going to take all this money, and then provide stimulus”. So the Government is going to come in and redistribute the money. As we have seen many, many times, they're not the most efficient vector for where that capital should flow to. I mean oftentimes they just end up putting these things into these weird boondoggles and stuff that I have never really seen there being a huge benefit to the overall country oftentimes. Not all the time. Don't get me wrong. There have been good initiatives that come from the public purse; don't get me wrong at all about that. But I think when doing a cost-benefit analysis on this, it's like look Tourism is a sector that's very important. The optics associated with that sector are also very important. When we're doing things that threatens the positive optics of that sector and thereby threaten the overall revenue that's generated thereby against the benefit of some government redistribution plan for some sort of as yet unseen stimulus, I just don't see where the benefit outweighs the overall possible cost associated with this.

That said, quoting further: "If imposed, this levy will clearly affect outbound travel," - Yeah - "which could in turn hurt inbound arrivals as air traffic relies on two-way demand to survive and sustain capacity." Yeah, so that's something that I've seen - first of all they were trying this as a Tourist Tax and it was on inbound travel. Then they kind of flipped the script and said no, no, we'll apply it to outbound travel, like trying to pull some kind of trick here. At the end of the day, if you impose a tax one way or the other on travel in and out - in or out - it will affect the other side of that equation, because if people say "well if I'm going to get taxed when I leave, why should I go there in the first place?" Quoting further: "Earlier this week, Tourism and Sports Minister Surasak Phancharoenworakul said the Finance Ministry previously planned to levy a 1,000-baht Departure Tax on Thai travellers by reviving the 1983 Emergency Decree on the Departure Levy, which has been suspended for more than two decades." Probably for good reason. It's been suspended more than two decades, 1983. That's four decades. Well okay, okay, it started then and then they suspended it 20 years after they started it; fair enough. But again, there's been good reason for suspending that. It has a drag impact on the tourism sector because again it impacts the optics for people that are looking to be tourists coming to Thailand. Quoting further: "Mr. Surasak said with outbound travel estimated at 10 million passengers a year, this Tax could generate around 10 billion baht in Revenue which could be distributed for domestic tourism stimulus instead of solely relying on the government budget."

Yeah, but they're not spending it in the country. If these folks came in and spent that extra thousand baht per person within the economy, it gets picked up in VAT; it gets picked up in other various taxes as that 1,000 Baht travels around via the concept of the velocity of money. 1,000 hits a vendor; they turn around and buy more inputs for their little shop or that 1,000 baht gets paid to a scuba dive operation, and they pay their employees, and they in turn go buy things with that money. There's velocity to this money. When it's just scooped up by the government, it's netting up. It's forestalling that possible economic capital potential; it's damming it up if you will. That's not good for the overall economy. That leads to more stagnation in the overall economy. Sure, the government can run around and then redistribute that money on whatever they want to spend it on, but oftentimes that's not the most efficient inputs for the overall economy. I'm not saying that there's not valid reasons for the Government to have to at times take taxes and go ahead and implement various Government initiatives, but to do so in light of the fact that again tourism is such an important sector of the economy - it's not the only sector of the economy - but it is one that's very much relies on positive optics, I think that this whole initiative could be frankly a negative for Thailand in a broad sense of the word.