Thailand will lower goods duties on cosmetics in 'shopping paradise' plan
According to Areepong Bhoocha-oom, permanent secretary at the Finance Ministry, the reduction in import duties will take one or two months to be implemented once proposed before the government, meaning that it will be effective towards the end of this year.
The new policy aims to make Thailand a “shopping paradise” which can compete with the likes of Singapore and Hong Kong in the consumer tourism stakes.
The government believes that this move will attract more foreign visitors, as well as increasing domestic spending on cosmetics.
Bhoocha-oom stated: “The government has a policy for Thailand to be a shopping paradise so it will reduce the tax on luxury imports to a competitive level with other countries like Singapore and Hong Kong, which have zero tariff on luxury goods like perfumes and cosmetics.”
Boosting spending per tourist
The luxury goods market is booming, with a 24 percent increase in year-on-year sales in 2013. Perfumes and cosmetics were in the top three product categories.
However, Bhoocha-oom said: “Thailand still subjects such goods to 30-per-cent duties. If tourists come to Thailand and can purchase all they want here, it would boost spending per tourist.”
The government also aims to improve cross-border trade, and is eyeing a series of initiatives which would give more funding to border activities and provide greater convenience for multi-country transactions.
Markets to emulate
These transformative measures aim to mimic Asian markets which have successfully drawn tourist consumers with low duties on cosmetics.
Hong Kong is described as being a “showcase” for cosmetics brands to be introduced to the Chinese market in the report “Cosmetics and Toiletries Market Overviews 2012”, compiled by the US Commercial Service.
The country received around 42 million tourists in 2011, with 76 percent visiting at least partially for shopping purposes. Exports also grew by 30 percent in 2012.
Import laws are also more lax, with registration not being required for cosmetics products.
The report also highlights the sophistication of Singapore’s cosmetics markets and their growth in the fields of skincare and hair care.