Excise Department eyes jet fuel tax discount to help domestic airlines

Excise Department mulls jet fuel tax discount.
Excise Department mulls jet fuel tax discount.

BANGKOK – Many low-cost domestic carriers have reported losses this year, one of the factors being the increase in jet fuel tax of 0.2 baht to 4.73 baht per litre in 2017. The losses have led to some airlines cancelling certain domestic routes. The Excise Department has held talks with airline representatives and fuel suppliers on the feasibility of reducing the jet fuel tax as a remedial measure.

At the meeting, the Excise Department ordered airlines to assemble information on benefits the general public would receive from a lower fuel tax, such as any reduction in airfares, service enhancements, and facilitation of tourism in smaller cities stemming from the opening of new routes.

Over the next two weeks, the department will be holding additional talks with the Tourism Authority of Thailand, the Ministry of Tourism and Sports, and private companies in the tourism industry on this matter.

The Excise Department’s Director General Patchara Anuatasilpa, said today the current jet fuel tax is not higher than the taxes imposed on other petroleum products, adding that any discount on jet fuel tax would only be offered as part of a short-term campaign.

Bangkok Airways’ Senior Vice President on finance and accounting Anawat Leelawatwatana, commented that the airline is willing to help promote Thailand as the region’s transportation hub, and promote tourism to local cities. He said however that added fuel costs account for 30-40 percent of the airline’s operational costs, which is rather high.

He said airlines would be capable of opening new routes serving more local cities should the government offer assistance in this regard.