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Exploring Thailand’s New Focus: Attracting Indian Tourists Amid Decline in Chinese Visitors

by Chief Editor
written by Chief Editor

The Shifting Sands of Southeast Asian Tourism: Thailand’s Pivot from China to India

As tourism destinations like Pattaya, Thailand’s famed holiday hotspot, witness a decline in Chinese visitors, the country is strategically shifting focus to tap into the burgeoning Indian tourist market. With China rolling out attractive policies that lure international tourists back, neighboring countries like Thailand must adapt or risk losing their competitive edge.

China’s Pull: Policies Luring Back Tourists

China is making a strong comeback in the tourism sector with policies to entice international visitors. The 13% VAT refund for foreign buyers and hassle-free transit visas, allowing up to 10 days stay, are drawing travelers irresistibly back. These developments underscore a significant challenge for Thailand to remain an appealing tourism destination.

Rise of Indian Tourists in Thailand

With the waning influx of Chinese tourists, India emerges as a promising market for Thailand’s tourism industry. Indian tourists are showing growing interest in Pattaya, drawn by diverse offerings from family holidays to business trips. Despite this shift, there’s a stark contrast from the group-centric Chinese visits to the more personalized experiences sought by Indians.

Overcoming Challenges in Attracting Indian Tourists

While Indians are increasingly pivotal for Pattaya’s tourism sector, several challenges need addressing. Cultural differences, flight connectivity, and holiday seasons pose hurdles. Notably, the repetitive visits characteristic of Chinese tourists differ from single, impactful visits typical of Indian travelers.

Taking Cautious Optimism

Officials like Thapanee Kiatphaibool from Thailand’s Tourism Authority emphasize the dangers of over-reliance on a single market. Strengthening tourist offerings, such as tax refunds and visa processes, and improving security remains crucial in attracting and retaining Indian tourists.

China’s Competitive Edge: A Double-Edged Sword

China is no longer just a source for tourism revenue but now a formidable competitor. Adith Chairatananon from the Association of Thai Travel Agents highlights this duality, stressing the need for Thailand to expand its ambitions beyond China and compete effectively alongside countries like Vietnam.

FAQs

What makes Indian tourists different from Chinese tourists?

Indian tourists typically prefer personalized experiences and are driven by milestones like family events or business trips, unlike the usual group tours of Chinese tourists.

What strategies is Thailand implementing to attract Indian tourists?

Thailand is enhancing visa processes, promoting tax refunds, and improving local offerings to cater to diverse Indian tourists’ needs.

Can India replace China as Thailand’s top tourism market?

While India shows great potential, replacing China entirely might be premature without strategic planning and overcoming existing challenges.

How is China’s new tourism policy affecting Southeast Asia?

China’s policies are drawing back international travelers, raising the stakes for Southeast Asian countries to innovate and refine their tourism strategies.

Learn More: Discover more about global tourism trends on our blog by exploring Global Tourism Trends.

Call to Action

What are your thoughts on these shifting tourism trends? Share your insights below or subscribe to our newsletter for the latest updates in the world of travel and tourism.

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"Prabowo Plans to Subsidize PPN, BBG, and BPHTB on Residential Property"

by Chief Editor
written by Chief Editor

Headline: Indonesia‘s New Housing Policies: Zero Taxes and Quicker Permits

Subheadline: Government aims to boost homeownership with tax exemptions and faster approvals.

Byline: Jakarta, CNBC Indonesia – January 8, 2025

Article:

The Indonesian government has unveiled a new set of policies to support homeownership, including tax exemptions and expedited permit procedures. Minister of Housing and Urban Planning Maruarar Sirait announced these measures, designed to be implemented within the first 90 days of President Prabowo‘s administration.

Key among these policies are:

  1. Tax Exemptions: BPHTB (Land and Building Ownership Tax) and Bentuk Bangunan Gedung (Building Form Tax) will both be set to 0%, while there will be a six-month exemption period for goods and services tax (PPN) for houses under IDR 2 billion.

  2. Accelerated Permit Process: The issuance of IMB (Building Permit), now known as Persetujuan Bangunan Gedung (Building Permit Approval), has been significantly streamlined. What once took up to 45 days can now be completed in just 10 days, with some areas like Tangerang achieving processing times as short as four hours.

Minister Sirait emphasized, "As per President Prabowo’s instructions, policies should be pro-people. We are committed to executing these measures promptly."

These changes are planned to stimulate housing demand and enhance Indonesia’s urban infrastructure.

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Dining Out Tax-Free: Here’s How to Enjoy 12% PPN Relief at Restaurants

by Chief Editor
written by Chief Editor

Title: Dining Out in Jakarta: What You Need to Know About Restaurant Taxes

In the vibrant city of Jakarta, dining out has become a staple for locals and visitors alike. But as you indulge in the culinary delights the city has to offer, understanding the tax landscape can help you make informed decisions. Here’s a simple guide to restaurant taxes in Jakarta.

PPN Increase Near Istana"</strong></p>”>Pajak Pertambahan Nilai (PPN) 101

pensait that meals at restaurants are subject to PPN, a value-added tax, with a rate of 12%. However, the Directorate General of Taxes (DJP) under the Ministry of Finance (Kemenkeu) has clarified this misconception.

In a recent statement on their official Instagram account, @ditjenpajakri, DJP explained that food consumption at restaurants is not subject to PPN. Instead, restaurant taxes are managed at the local level by regional governments.

Yet, how are these taxes applied?

Understanding Restaurant Taxes in Jakarta

Food and beverages served in hotels, restaurants,-warungs, catering services, and similar establishments are subject to regional taxes, as per Undang-Undang Nomor 7 Year 2021 regarding the Harmonization of Taxation Regulations (HPP).

This tax, often referred to as the Pajak Barang dan Jasa Tertentu (PBJT), is not administered by the central government but rather by local authorities. The tax applies to food and drinks consumed on-site or taken away, including those supplied by catering services.

The Rate of Restaurant Tax

The rate for this specific PBJT is capped at 10%, according to Undang-Undang Nomor 1 Year 2022 on the Financial Relations between the Central and Regional Governments (HKPD).

The tax base, or the amount on which the tax is calculated, is the price consumers pay for these goods and services. If there’s no payment, the tax base is determined by the average price of similar goods and services in the region.

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OJK Clarifies: Are Stock Transactions Subject to 12% VAT?

by Chief Editor
written by Chief Editor

Title: OJK Clarifies Upcoming 12% VAT on Luxury Goods & Services; Impact on Capital Markets

In a recent development, the Otoritas Jasa Keuangan (OJK) has provided clarity on the impending 12% value-added tax (PPN) set to be implemented on luxury goods and services starting January 2025. This new policy has.
//
// KEY POINTS
// – The 12% PPN applies to luxury goods and services beginning January 2025.
// – Capital markets adjust to accommodate this new tax policy.
//

OJK’s Perspective

Speaking at a virtual press conference on Tuesday, Inarno Djajadi, Head Executive of OJK’s Supervision for Capital Markets, Derivatives, and Carbon Exchanges, explained that stocks are not subject to the tax, but securities dealers (intermediaries in the trading of securities) are taxable entities (Pengusaha Kena Pajak – PKP). The taxable service (Jasa Kena Pajak – JKP) in this context is the transaction fee for securities.

"Therefore, the basis for PPN is the fee or commission from securities transactions, which is part of the cost component for securities sales," Inarno said.

Calculating the PPN

The Bursa Efek Indonesia (BEI) has issued Securities Letter Number S-0001/BEI.KEU/01-2025, dated January 1, 2025, specifying the calculation method. According to Irvan Susandy, Director of Trading and Membership Regulation at BEI, the PPN rate for 2025 capital market transactions is calculated by multiplying the 12% rate by the tax base, which is 11/12 of the invoice value.

This results in an effective PPN rate of 11%, aligning with the latest regulations while considering the adjusted tax base.

_______________________________

WATCH NOW
– Video: List of Goods Affected by 12% PPN: From Motorcycles to Luxury Homes

[Gambas: Video 20detik]

(kil/kil)

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**’.

**Revolutionizing Home Ownership: Governments Abolish BPHTB, PBG, and PPN Taxes

by Chief Editor
written by Chief Editor

Headline:
Indonesia to Scrap Taxes on Home Purchases: BPHTB, PBG, and PPN Axed to Boost Home Ownership

Article:

The Indonesian government has announced plans to eliminate several taxes and fees imposed on citizens purchasing homes, aiming to boost homeownership and support the housing sector.

Breaking Down the Changes:

  1. Bea Perolehan Hak Atas Tanah dan Bangunan (BPHTB) – This tax, currently set at 5% of the selling price (after excluding the Nilai Perolehan Objek Tidak Kena Pajak), will be slashed to 0%. Minister of Housing and Settlement Maruarar Sirait revealed that this decision was reached in a joint decree signed by Ministers Tito Karnavian (Interior), and Dody Hanggodo (Public Works).

    "Reducing BPHTB to 0% will significantly help Indonesian citizens afford their own homes," Minister Sirait stated at the Presidential Palace on Tuesday (7/1).

  2. Persetujuan Bangun Gedung (PBG) – This building permit fee, which varies depending on factors like construction cost, size, and location, will also be eliminated for residential buildings. Minister Sirait confirmed, "PBG for residential buildings will be 0%."

  3. Pajak Pertambahan Nilai (PPN) – In six months, PPN for home purchases under IDR 2 billion will be waived. Minister Sirait explained, "This is about helping low- and middle-income families afford their own homes."

To further facilitate homeownership, the government is also expediting the issuance of building permits. The process, previously taking 45 days, will now be completed within 10 days.

Sources:
CNN Indonesia

Internal Linking Opportunities:

Potential Related Topics:

  • The impact of tax reductions on Indonesia’s housing market
  • How these changes affect first-time homebuyers
  • Indonesia’s commitment to increasing homeownership rates
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The Fate of Prabowo’s PPN Batal Naik Program After Rp75T HANGUS Imbas

by Chief Editor
written by Chief Editor

Headline: Indonesia Shelves PPN Hike, Losing Out on Rp75 Trillion in Revenue

Subhead: Government scraps planned 12% VAT increase, impacting APBN 2025 and presidential programs

Article:

In a policy U-turn, the Indonesian government has abandoned plans to raise the value-added tax (VAT) or pajak pertambahan nilai (PPN) from 11% to 12% as of January 1, 2025. This decision, announced by Wakil Ketua DPR RI Sufmi Dasco Ahmad, has significant fiscal implications, with the government set to miss out on potential revenue of Rp75 trillion.

Theatetration of a 12% PPN would have only applied to barang mewah (luxury goods), a departure from the original plan to implement it across all goods and services. According to Dasco, the new policy change means that instead of the projected Rp75 trillion, the government will only gain an additional Rp3.2 trillion in additional APBN funds for 2025.

Menteri Keuangan Sri Mulyani Indrawati played down the impact of the lost revenue, saying that the APBN management for 2025 is still dynamic and will be updated monthly. Dirjen Pajak Suryo Utomo acknowledged the loss but asserted that they would explore other avenues to boost tax revenue.

The decision to scrap the PPN hike could pose challenges for President Prabowo Subianto‘s administration, which has ambitious spending plans, including the Makan Bergizi Gratis (MBG) program, budgeted at Rp71 trillion this year. Analysts suggest that while the lost revenue will impact the fiscal position, it may not directly affect Prabowo’s flagship programs.

Ronny P Sasmita, Senior Analyst at the Indonesia Strategic and Economic Action Institution, argues that the government might consider raising debt or reallocating funds from low-priority projects to offset the lost revenue. However, he believes that Prabowo is unlikely to cut fuel subsidies to fund other programs due to the potential political backlash.

Yusuf Rendy Manilet, Economist at the Center of Reform on Economics (Core) Indonesia, agrees that the government has some room to maneuver and can consider optimizing revenues from other sectors, digitalizing taxation systems, and improving governance to compensate for the lost PPN increase.

Meanwhile, sustainability experts propose alternative revenue-generating measures. Tata Mustasya from SUSTAIN Indonesia suggests raising export taxes on coal and nickel to generate potentially Rp84.55 trillion to Rp353.7 trillion yearly. Abdurrahman Arum of Transisi Bersihi adds that a 10%-20% export tax on nickel products could generate Rp50 trillion to Rp100 trillion annually.

In conclusion, the Indonesian government’s decision to scrap the PPN hike has significant fiscal implications, posing challenges for President Prabowo’s administration. To offset the lost revenue, the government should explore various fiscal policy adjustments, improved governance, and revenue-generating measures to maintain its ambitious spending plans while ensuring fiscal sustainability.

Keywords: PPN, VAT, Indonesia, Prabowo Subianto, APBN 2025, Makan Bergizi Gratis, fiscal policy, revenue

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Honda Brio Gets Boost with 12% PPN Reduction, Manufacturer Explains

by Chief Editor
written by Chief Editor

Honda Brio Satya Braces for 12% PPN Hike: Price Increase Inevitable, Extra Perks Promised

PT Honda Prospect Motor (HPM) has confirmed that the recently implemented 12% Value Added Tax (PPN) will indeed impact the pricing of the Honda Brio Satya. The company is currently reviewing the new tax rules to determine the final price of the vehicle.

Yusak Billy, Director of Marketing at PT HPM, stated, "We are still in the process of studying the new tax rules to finalize the price of the Honda Brio Satya post the 12% PPN implementation. Once we have completed this process, we will announce the final price, including the impact on the vehicle’s cost."

Billy further explained, "The price of a vehicle is indeed influenced by the tax rate. We are currently analyzing the details of the new tax rules to determine the final selling price with the 12% PPN in place."

When asked about the potential price increase, Billy assured, "When the price does increase, we will ensure that we provide additional value to our Indonesian customers. Their satisfaction remains our top priority. We are also preparing programs to make the purchasing process more convenient and affordable for our customers."

The Honda Brio Satya is currently priced starting from Rp 167 million on the road in Jakarta. Despite the tax adjustment, the final price is expected to remain below Rp 200 million.

Indonesian Finance Minister Sri Mulyani has previously confirmed that all motor vehicles subject to Luxury Goods Tax (PPnBM) will be affected by the 12% PPN. Currently, Low Cost Green Cars (LCGCs) are taxed at 3% PPnBM, in accordance with the prevailing regulations.

The list of luxury goods subject to PPnBM is outlined in PMK Number 141 of 2021, with a more detailed list of non-motor vehicle luxury goods included in PMK Number 15 of 2023.

When first introduced 12 years ago, LCGCs benefited from a 0% PPnBM rate, as per the Minister of Industry Regulation Number 33/M-IND/PER/7/2013 on the Development of Energy-Efficient and Affordable Four-Wheeled Motor Vehicle Production. To qualify for this tax exemption, vehicles had to meet certain criteria, such as having an engine capacity of 980-1200cc and a fuel consumption rate of at least 20 km/liter.

However, since October 2022, LCGCs are no longer fully exempt from PPnBM and are taxed at the standard 3% rate.

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"Retailers Mandatorily Revert 12% PPN to Consumers"

by Chief Editor
written by Chief Editor

Headline:
Retail Shoppers in Indonesia to Get PPN Refunds: Dirkjen Pajak

Article:

Retail consumers in Indonesia can breathe a sigh of relief as the Director General of Taxes (DJP) at the Ministry of Finance (Kemenkeu) announced plans to refund the 12% Value Added Tax (PPN) they’ve already paid. The refund is in response to the recent tax hike, which was later reversed by the government.

Director General of Taxes Suryo Utomo confirmed the refund during a media briefing at DJP Kemenkeu in South Jakarta. However, he noted that the refund mechanism is still being discussed and will be finalized in the near future.

"In principle, the rightful owner [of the tax revenue] is the state, but the rightful owner of the refund is the taxpayer. The manner of refund will be arranged later. I assure you, it won’t be burdensome for the taxpayers," Suryo said.

The refund is expected to be in place for retail consumers who have paid the 12% PPN, although the exact timeline and process remain uncertain. The tax authority is also currently negotiating with retail businesses to revert their tax systems back to the previous 11% PPN rate.

Suryo emphasized that the implementation of the 12% PPN, as mandated by Law No. 7/2021 on the Harmonization of Tax Regulations, will continue until January 1, 2025. Meanwhile, the government has decided not to increase PPN for non-luxury goods, necessitating a new basic tax rate (DPP) set by a Minister of Finance Regulation (PMK).

"We’re currently discussing with them [retailers], trying to figure out if three months would be sufficient for them to update their systems," Suryo added. Following the event, Director of Public Relations, Customer Service, and Community Relations at DJP Kemenkeu, Dwi Astuti, confirmed that the PPN transition would take no more than three months.

During the transition period, businesses are expected to continue charging 12% PPN, with refunds to be issued later. Consumers are advised to keep their receipts for easy tracking and refund claims.

(fby/sfr)

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Tax Chief’s Resistance to Prabowo’s Audit: Should He Resign?

by Chief Editor
written by Chief Editor

Headline: Clarity on Indonesia‘s PPN 12%: Lawmaker Challenges Director General of Taxation‘s Interpretation

In a surprising turn of events, the planned implementation of Indonesia’s 12% Value Added Tax (PPN) by the end of 2024 has sparked confusion and concern, with a top lawmaker accusing the Director General of Taxation of misinterpreting presidential directives.

President Prabowo Subianto had clearly stated that the PPN increase from 11% to 12% would only apply to luxury goods and services. However, Mukhamad Misbakhun, the chairman of the House of Representatives’ Committee XI, has found that the implementation by the Director General of Taxation is ambiguous and chaotic, with the ministerial regulation (PMK) No. 131/2024 causing confusion among businesses.

Misbakhun criticized the PMK for using a different basis for calculation, stating, "It’s as if the UU HPP cannot apply the PPN with multiple tariffs." He argued that the law does not prohibit a multitariff system, allowing for both 11% and 12% rates to coexist, with the latter only applied to luxury goods and services.

The Director General of Taxation, however, maintains that the PMK correctly implements the presidential instruction. In a separate statement, the Ministry of Finance declared that standard-rated items will be taxed at 12%, calculated with a factor of 11/12 of the selling price, replacement cost, or import value.

Misbakhun expressed bewilderment at this approach, stating, "Does this mean the Director General of Taxation has lost its loyalty in interpreting the president’s clear instructions?"

The lawmaker also slammed the rushed decision-making process, stating that the short lead time before implementation left businesses struggling to adapt their systems. He added that many retail companies have already charged PPN at 12%, confusing customers who ended up paying more than they should have.

Misbakhun lamented the complexity of the regulation, urging the Directorate General of Taxation to issue simpler, clearer rules to prevent misinterpretations and erode public trust in the presidency.

This is a developing story. Check back for updates.

(Reported by rfs and dhn)

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Viral Shopping Receives 12% PPN: Tax Chief Finally Speaks Up

by Chief Editor
written by Chief Editor

Headline:
President Prabowo Clarifies PPN Hike: Only Luxury Goods Affected, Retailers to Refund Overcharges

Article:

Retail shoppers should not be Concerned about the 12% Value Added Tax (PPN) increase as of January 1, 2025 – at least not for now. President Prabowo Subianto has made it clear that this new tax rate only applies to luxury goods, such as private jets and yachts. Meanwhile, retailers are scrambling to refund overcharges they’ve already collected.

The Directorate General of Tax at the Ministry of Finance (DJP) has confirmed that they’ve met with retail businesses to discuss the confusion surrounding the PPN hike. Director General Suryo Utomo acknowledged that retailers have already updated their systems to reflect the increased tax rate, but assured consumers that the excess taxes collected will be refunded.

"We’re working on setting up a system to refund the overcollected PPN 12% to consumers," Suryo stated at a Media Briefing in Jakarta on Thursday (2/1). "It’s the state’s duty to ensure these funds are returned to their rightful owners."

The DJP is aware that retail systems have been updated to charge the 12% tax rate, but they are in talks with businesses to facilitate a swift transition back to the original 11% rate for non-luxury items. The transition period is expected to take around three months, with retailers having until the end of April to adjust their systems.

During the transitional phase, it’s possible that some retailers may mistakenly continue charging the 12% tax rate. In such cases, consumers can expect a refund mechanism to be implemented to reimburse any overpaid taxes.

The DJP emphasizes its commitment to enforcing the 2021 Harmonization of Pertinent Laws on Taxation (UU HPP) regarding the PPN increase to 12% as of January 1, 2025. However, the government has decided not to raise the PPN rate for non-luxury items, requiring a new base tax value (DPP) to be set through a Minister of Finance Regulation (PMK).

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