FINANCE MINISTRY MULLS TAX BREAKS

       The Finance Ministry is considering waiving all or part of the 10-per-cent excise tax on spa services,to promote tourism, one of the key sectors vital for economic growth.
       "I have assigned senior official to look at tax issues for the spa business," Finance Minister Korn Chatikavanij said yesterday after chairing the opening ceremony for the "Thais Travelling Thailand" fair at the Queen Sirikit National Convention Centre in Bangkok.
       However, he did not say how much the excise tax should be cut.
       The ministry imposes a 10-per-cent excise tax rate on spa and massage-parlour services, partly because they consume a great amount of water. Owners of these services are also subject to income tax.
       A source said the ministry might eliminate the excise tax but that the cut would apply only to spas and not to massage parlours.
       Previously, the ministry targeted collecting tax from massage-parlour services, as it did not want to support underground sex services. Tax was imposed on spas in order to prevent tax evasion by massage-parlour operators concealing their activities as spa services. Spa services until recently were not promoted by the government.
       Legitimate spa services have become popular in recently years, due to both health consciousness among consumers and government support.
       "We may make new definitions of the spas that will enjoy tax cuts, and their services may need to be certified by the Public Health Ministry," the source said.
       Korn said the government had also assigned the Government Savings Bank and the Small and Medium Enterprise Development Bank to lend more in support of tourism, which had suffered heavily from political instability, global economic turmoil and the outbreak of type-A (H1N1) influenza.
       Korn was optimistic, saying there were signs of tourism recovery, with Thai Airways International, the national flag carrier, reporting more ticket bookings. He conceded that foreign tourists are still concerned about political rallies in the country.
       "Tour agents are asked by tourists whether there will be airport blockages or street violence," said Korn.
       Korn said one way to promote tourism is to campaign for in-country travelling among Thai customers.
       About 800 counters of tour agents, hotel, airlines, spa and car rentals are participating in the fair, which runs until Sunday. Exhibitors estimate the fair will generate Bt400 million in sales of tour packages.