As from the end of this month, foreign tourists visiting Thailand will be able to claim refunds of any value added tax (VAT) levied on purchases via a blockchain-based app and have the funds sent straight to their credit card or mobile payment app. Local reports state the service will go live on 28th November and comes after the signing of a memorandum of understanding (MoU) between the Thailand Ministry of Finance and Krungthai Bank.
In addition to reducing the Ministry’s management cost and applicants paperwork by introducing blockchain payments, the Thai Government have also increased the ceiling on VAT claims from ฿12,000 to ฿30,000 per tourist.
Although Krungthai Bank (KTB) is providing the technology solution for the VAT refunds and is listed on the Stock Exchange of Thailand (SET), the Ministry of Finance holds a majority shareholding in the bank and have previously utilised them to support governmental initiatives.
The latest MoU agreement will also see Krungthai handling two other blockchain projects for the Ministry of Finance. Expected to be released next year, these will involve the issuing of public savings bonds and the issuing of letters of credit relating to state procurement.
According to figures from The Bangkok Post, it is estimated that around 2 million foreign tourists visit Thailand annually and collectively spend 50 billion Thai Baht per year. Almost 70% of the 200,000 VAT claimants per month are Chinese travellers and the news source quote Finance Minister Uttama Savanayana as saying this group of visitors prefer to receive electronic payments to holding cash.
With Chinese President Xi Jinping now openly supporting blockchain technology integration and with the nation’s central bank said to be close to launching it’s own digital currency, Thailand may have found an opportune time to introduce a service aligned to the majority of the country’s tourists.