Archives

TAT Governor marks more than 100 Phuket tourism operators awarded SHA certification

03/07/2020

PHUKET: Tourism Authority of Thailand (TAT) Governor Yuthasak Supasorn was in Phuket yesterday (July 2) to mark more than 100 Phuket tourism industry operators being certified under the Amazing Thailand Safety & Health Administration scheme.

Phuket Governor Narong Woonchiew co-chaired the event, held at the Angsana Convention and Exhibition Space (ACES) MICE facility at the Angsana Laguna Phuket resort yesterday afternoon.

A total of 136 Phuket tourism operators were granted the certification for Safety and Sanitation Standards under the SHA scheme launched only last month.

Mr Yuthasak explained that the SHA project is a standard assessment of the TAT in collaboration with the Ministry of Public Health by the Department of Disease Control and the Department of Health.

The scheme was launched to raise tourism industry standards in tandem with safety and hygiene standards, he said.

“The objective is to build trust among tourists after the COVID-19 situation is safe for travel by encouraging operators in the tourism industry to make improvements in both services and hygiene,” Mr Yuthasak said.

Those certified under the scheme will be promoted through various channels of the TAT both locally and abroad, he added.

“The tourism industry entrepreneurs receiving the SHA certification today is one thing that will answer [the question of] the readiness and potential of tourism in Phuket,” Mr Yuthasak concluded.

“In addition, the TAT is ready to push Phuket to be a pilot area for ‘Travel Bubbles’ as soon as possible,” Mr Yuthasak assured.

“I believe that visitors must travel back to Phuket. Because Phuket is ready, which TAT will support Phuket.”

Phuket Governor Narong Woonchiew also said that the event yesterday demonstrated the readiness of the private sector, “especially the standardised tourism industry that is ready and builds confidence for tourists who will travel to Phuket.”

TAT Phuket Office Director Napasorn Kakai said that 453 establishments in Phuket had applied for SHA certification.

So far 251 had been approved, she noted.

“That is the second-highest in the country, after Bangkok, and there are still establishments that are in the evaluation process,” Ms Napasorn said.

The TAT has been accepting applications for businesses to be audited for certification under the SHA scheme since May 18, Ms Napasorn explained.

Applications are still being accepted, she added.

Ms Napasorn urged businesses to be certified under the scheme.

“For more information, please email info@thailandsha.com, visit the official Line account @thailandsha or call 1672.” she said.

Director-General of the Department of Health, Dr Panpimol Wipulakorn, late last month repeated the call for not just hotels, but all major tourism-related businesses to be accredited through the government’s (SHA) certification.

“SHA is a safety standard for tourists to check the places that have been allowed to reopen,” she said.

“We also give business owners suggestions through the TAT website and send officers to inspect places periodically, in order to stimulate them to prepare for the new normal and create health and safety policy for business owners, workers, and visitors,” she added.

Dr Panpimol urged the owners of 10 types of tourism businesses to register to receive SHA certification: restaurants; hotels or accommodation and conventions; recreational activity and tourist attractions; transport operators; travel agencies; health and beauty service operators; department stores and shopping centres; tourism sport venues; theatres, cinemas and other venues for entertainment and activities; and souvenir shops.

Courtesy: Published at The Phuket News on July 3, 2020 by Eakkapop Thongtub

Read More

Chinese tourists for Phuket ‘bubble’

03/07/2020

PHUKET: The Tourism and Sports Ministry will target specific provinces in China in a campaign to attract visitors back the resort island as travel restrictions are eased.

Minister of Tourism and Sports Pipat Ratchakijprakarn said on Friday (July 3) the ministry will not splash out money launching a tourist campaign across China. It will target provinces that have the coronavirus under control. He would not say which provinces.

Phuket was being eyed to lead the planned tourism bubble comprising Thailand and its selected partners. The primary target was China, he said.

“China is the first market with potential, because flying time to Thailand is less than six hours,” Mr Pipat said.

Other markets were South Korea, Japan, Australia, New Zealand and other southeast Asian countries.

One in every four foreign visitors to Thailand before the pandemic was Chinese, he said.

There were almost 40 million foreign arrivals last year, but the Bank of Thailand expects only 8 million this year after COVID-19 grounded airlines and stopped tourism in its tracks.

Courtesy: Published at The Phuket News on July 3, 2020 by Bangkok Post

Read More

Le Meridien Phuket Beach Resort awarded ‘SHA’ certification

02/07/2020

PHUKET: Le Meridien Phuket Beach Resort has been awarded the Amazing Thailand ‘Safety and Health Administration – SHA’ Certificate. The SHA certificate ensures travelers that the hotel is ready for domestic and international guests return post-COVID-19.

The certification confers that Le Meridien Phuket Beach Resort has met the health and safety high standards the SHA programme requires, which ranges from hygiene of the workplace and its facilities, public areas, guestrooms, meeting rooms, restaurants, staff hygiene to guest safety protocols.

The Amazing Thailand Safety and Health Administration (SHA) project is a result of cooperation between the Ministry of Tourism and Sports, the Tourism Authority of Thailand (TAT), the Ministry of Public Health, the Department of Disease Control, the Department of Health and the Department of Health Service Support, as well as government and private sector organisations involved in the tourism industry.

“Together they aim to make tourism a part of Thailand’s disease prevention measures and ensure that both Thai and foreign tourists have a positive experience, that they are happy and confident in the sanitation and safety standards of Thailand’s tourism products and services. This can be achieved by combining public health safety measures and the establishments’ high-quality service standards to reduce the risk and prevent the spread of COVID-19, as well as improving Thailand’s tourism products and service standards.” explained the TAT in announcing the SHA certification scheme.

In addition to the SHA certification, Le Meridien Phuket Beach Resort has also put in place a Property Cleanliness Council comprised of two senior leaders along with the department heads as members of the council, sais a statement from the resort announcing its SHA certification.

“They are responsible for the hotel’s cleanliness program following Marriott’s Commitment to Cleanliness standards and leveraging on tools available. The council is also able to answer guests’ questions on cleanliness and hygiene during their stay. Marriott’s Commitment to Cleanliness Global Council and the Property Cleanliness Council are actively monitoring the authorities’ guidance and come up with effective solutions to ensure a diligent focus on our guests’ and associates’ safety,” the statement explained.

The council covers cleanliness practices and hospitality norms and behaviors from the overall property, public spaces, guest room, back of the house, engineering, restaurant & bar, food & beverage, housekeeping to contactless service through the Marriott Bonvoy app.

Le Meridien Phuket Beach Resort General Manager Julian Lowry said, “Le Meridien Phuket Beach Resort is ready to welcome you back to our resort. Good news is, we have opened our doors since 1st July for you to visit and rediscover the destination with all the safety standards in place. Another piece of good news is, it is not only us who have been working hard in making your stay safe and with ease, it is all establishments all over the country with the leadership of TAT. We are very grateful for the efforts of everyone as we remain positive, committed and vigilant in delivering a safe and healthy service.”

Courtesy: Published at The Phuket News on July 2, 2020 by PR

Read More

Phuket tourism industry told to ‘ready for beach holiday tourists’

01/07/2020

PHUKET: Operators in Phuket’s tourism industry have been urged to prepare to receive the first international tourists in months in August as the Ministry of Tourism & Sports pursues its strategy of restarting the country’s economy, Phuket Chamber of Commerce President Thanusak Phungdet told The Phuket News today (July 1).

Mr Thanusak along with Phuket Governor Narong Woonchiew were in Bangkok on Monday to attend a meeting led by Minister of Tourism and Sports Phiphat Ratchakitprakarn, after which Minister Phiphat announced the new “beach tourists campaign”, Mr Thanusak explained.

Also joining the meeting were Vachira Phuket Hospital Director Dr Chalermpong Sukontapol and business representatives from the island, he added.

“Tourism and Sports Minister Phiphat told us that we must be ready to host beach holidays. Phuket is one of five island destinations in Thailand chosen to launch the campaign,” Mr Thanusak explained.

“Thailand will open for foreign tourists to come to the country in August,” he added.

“This is earlier than the previous plans, which would not restart  inbound tourism until September or October,” he noted.

Mr Phipat understood the importance of tourism for Phuket, Mr Thanusak assured.

“By Gross Domestic Product (GDP), Phuket relies on tourism for revenues than any other industry,” he said.

However, Mr Thanusak remains reserved about his expectations for tourism to restart as early as next month, and maintains that domestic tourism will return first.

“I expect that people will only start coming to Phuket when the government starts distributing its subsidised travel scheme,” he said.

The push for Phuket to prepare for international tourists comes as the ban on all inbound international commercial passenger flights expired at midnight last night, with six groups of foreigners allowed to enter Thailand as of today (July 1).

However,  Phuket International Airport General Manager Thanee Chuangchoo told The Phuket News that so far there has been no expression of interest from airlines resuming international flights to Phuket.

“Zero airlines have booked slots for international flights to land in Phuket,” he said.

“I think they will come later, and this all depends on the central government’s decisions,” he added.

Mr Thanusak and Governor Narong also presented the proposal to build a public-private medical tourism facility at the far northern tip of the island.

The proposal was also presented to Deputy Prime Minister Anutin Charnvirakul, who also serves as the Public Health Minister, at a separate meeting.

“Both Mr Anutin and Mr Phiphat liked the idea and accepted the proposal for further consideration.” Mr Thanusak said.

Courtesy: Published at The Phuket News on July 1, 2020 by Tanyaluk Sakoot

Read More

Phuket’s (in)famous “Soi Bangla” district reopens today

01/07/2020

Today is the official reopening of Phuket’s famous (or infamous) “Soi Bangla” nightlife district, but only about 20% of venues say they’re reopening during this early stage. The Centre for Covid-19 Situation Administration announced yesterday that all night entertainment venues may reopen but must strictly adhere to health guidelines set out to prevent the spread of Covid-19.

Dr Taweesilp Visanuyothin, the spokesman for the CCSA, says night entertainment venues, including pubs, bars, karaoke venues and beer gardens will be allowed to open, but only until midnight. Social distancing measures will be strictly enforced, and customers must use the Thai Chana app to check in and out.

The Patong Entertainment Business Association president says only about 20% of the 324 registered members are expected to reopen initially, but he expects more to reopen soon. Among the 22 rules announced last week- to be presented to the CCSA for approval- were that all staff must wear face masks and face shields, but performers may wear face shields only. No bottles are to be served, and all drinks are to be served in glasses. No pool table games (including snooker and billiards) and no dart games are to be allowed.

The number of guests in each venue is to be restricted to cater for social distancing, with at least 2 metres between tables, or partitions must be installed to ensure patrons are seated at least one metre away from each other.

Undercutting the main reason people visit popular venues, the draft rules also call for groups to be limited to 5 people, and for guests to be prohibited from dancing and singing, gathering, shouting, or “wandering around the premises”.

“I have no idea what the rules will be, but we will open anyway. If the full list of 22 rules for pubs, bars and entertainment venues is to be applied, we won’t be able to enforce all the rules, because enforcing all these rules is impossible. But we can follow some of the rules, such as social distancing, wearing masks and checking temperatures.”

Even Patong’s mayor told The Phuket News that she is yet to receive a copy of all the rules to be enforced.

“The next thing to do is follow up with the CCSA about the rules. This is very important for the entertainment industry in Patong. I will help and consider being flexible with the rules for entertainment businesses in Patong, because the rules announced by CCSA are the general rules for many places. But some of these rules are not appropriate for businesses here. We have to apply the right rules and optimise them for businesses in Patong.”

The PEBA president dismissed a few entertainment zones being singled out in other countries as “hotbeds for starting a second wave” of Covid-19 infections.

“I do not care what some people claim is the risk of being in a bar. If the government is genuinely concerned about the risk of Covid-19 spreading, then it is not just about bars, pubs and entertainment venues. The risk of Covid-19 spreading applies anywhere where people are around, not only at bars and pubs.”

Courtesy: Published at The Thaiger on July 1, 2020 by Jack Burton

Read More

Thailand’s hotel industry pushing ahead with recovery

30/06/2020

Optimism is building in some corners of the hospitality industry as Thailand pushes ahead with it Covid-19 recovery phases. Occupancy rates in at least Bangkok and Phuket are likely to bottom out soon with the lifting of travel restrictions, according to JLL Hotels & Hospitality Group.

Thailand’s hotel industry is now entering a recovery phase following the country’s decision to issue a partial easing of lockdown measures, including inter-provincial travel restrictions. There is an expected surge in domestic travel and tourism with the reintroduction of domestic flights, and the slow opening of international borders in the coming months.

The country’s tourism and hotels sector has been significantly impacted since the first reported case of Covid-19 in Thailand on January 13, 2020.

“With the country introducing a government-directed lockdown and placing strict limitations on domestic and international mobility, revenue per available room trended downward during the first four months of 2020, led by declines in occupancy.”

However, optimism of a gradual recovery remains high for both markets, given strong domestic and global brand recognition and a mature hospitality sector well-prepared to align with stringent health and safety guidelines introduced by The Tourism Authority of Thailand ‘s “Amazing Thailand Safety and Health Administration program.

“In 2019, Bangkok was named, for the fourth consecutive year, as the most popular travel destination in Mastercard’s Global Destinations Cities Index, while Phuket was rated the #2 Most Popular Asia Destination by TripAdvisor.”

Chakkrit Chakrabandhu Na Ayudhya, Executive VP, Investment Sales, Asia Pacific, JLL Hotels & Hospitality Group says that Thailand’s hotel industry is a bellwether market in global and regional hospitality circles.

“Its Covid-19 recovery will be closely observed by operators and investors. With both government and bank support, we’re optimistic a market like Bangkok, with its well-balanced offering to business and leisure demand, will be amongst the first hotel sectors regionally to display meaningful recovery, whilst Phuket will take relatively longer as it relies more on international and leisure demand.”

The maturity of Thailand’s hotel space, as well as bank and government support so far, have helped the industry alleviate the full impact of Covid-19, despite wide-spread issues with cash flows and fixed operational overheads. JLL expects fewer distressed asset sales in Bangkok compared to other markets in Thailand due to robust balance sheets held by many owners. Investors have been looking for opportunities in Thailand, with greater interest expected initially from developers and private equity firms who tend to be less risk-averse as the recovery gains momentum.

According to JLL’s Hotels & Hospitality, operators and investors in Thailand’s hotel industry should also consider several factors to optimise their recovery strategies:

  • Critically evaluate hotel positioning and segmentation mix in light of extensive current supply and future pipeline.
  • Calculate breakeven occupancy and factor in gradual demand ramp up, taking into consideration potential travel bubbles being considered by the Thai government.
  • Focus on brand, operating and distribution partners when setting out a differentiating strategy to the local market, whilst following the opening of borders carefully.
  • Take advantage of the government’s domestic tourism promotion to help restart operations and build local customer loyalty; launch staycation packages to take advantage of pent up domestic demand
  • Look for every opportunity to get guests ready for post-Covid-19 travel, embrace the restrictions and set up health and safety protocols for the reopening.

Courtesy: Published at The Thaiger on June 30, 2020 by JLL

Read More

TAT reworks healthcare tourism goal

29/06/2020

BANGKOK: Thailand is setting a new goal to become a global medical and wellness destination by 2024, aiming to lure international travellers and 1 million overseas Thais, according to the Tourism Authority of Thailand (TAT).

As the pandemic raises awareness about healthcare and accelerates demand for preventive and regenerative medicine, the TAT sees an opportunity, particularly with the country’s solid reputation for medical services, said TAT Governor Yuthasak Supasorn, reports the Bangkok Post.

Before the outbreak, the country already had a solid market share in medical and wellness, with 3.2 million international travellers and B45 billion total income in 2018, Mr Yuthasak said.

To achieve this new goal in five years, the TAT will expand the target market to some 1mn Thais living abroad after witnessing their difficulties in accessing medical services in other countries at a critical time.

Srisuda Wanapinyosak, deputy governor of the TAT for Europe, Africa, the Middle East and the Americas, said the plan will consist of five campaigns.

The first is to provide telemedicine for overseas Thais under a partnership with the online platform for medical services, Dr A to Z, and the Department of Consular Affairs.

Ms Srisuda said online services are cheaper than seeing doctors in foreign countries and will provide Thais better well-being and attract more of them to return to seek additional medical services on home soil.

The second campaign is to enlist hotels as stakeholders in tapping medical and wellness tourists globally.

The TAT will encourage more hotels in Thailand to develop healthcare services on the property by collaborating with accredited hospitals to provide some types of medical or health treatments that do not need to take place at hospitals, such as general check-ups, ozone therapy, immunity boosters or chelation therapy.

“Hotels can be another communication and distribution channel to publicise health services in Thailand,” Ms Srisuda said.””They can work with partner hospitals in giving preliminary consultations before guests travel to Thailand for medical packages.”

Another campaign focuses on increasing market reach to various sources by creating a business-to-business online platform for health and wellness operators in Thailand and health agents or facilitators overseas.

The fourth campaign is to expand the government-to-government partnership to more countries, targeting civil servants who have state insurance.

The fifth campaign is to increase agents and media outreach through 29 TAT offices globally.

Vorasit Pongkumpunt, group vice-president of Nora Resorts and Hotels Group, said demand for health and wellness will strengthen after the pandemic.

This is a key segment for boosting tourism in Koh Samui, alongside entertainment, natural resources and community tourism, Mr Vorasit said.

Some 10% of 600 hotels on the island are focused on health and wellness, but more players will jump into this market to gain a new source of revenue, he said.

Courtesy: Published at The Phuket News on June 29, 2020 by Bangkok Post

Read More

‘Back to basics’ tourism urged to restart the economy

28/06/2020

The call for “back to basics” tourism came at a seminar at the Prince of Songkla University Phuket campus on Thursday (June 25), held to discuss and present a “white paper” on strategies to restart the island’s economy.

At the meeting, the Governor was told that the pandemic had already cost Phuket B160 billion in lost revenues.

Experts at the seminar pointed out that Phuket was not expected to have any more than 5 million tourists in total this whole year, with 1.5mn of those being Thais.

However, according to a report of the seminar, the Governor was also urged to help develop the island’s economy to be not so dependent on tourism alone as an estimated “80-90%” of the island’s income derived from tourism.

“When we have a problem with tourism activities due to the incidents such as the outbreak of COVID-19, the economy is greatly affected,” the report said.

Developing other sectors through public-private projects would help stimulate the economy and help the island cope with other situations that may occur in the future, the report added.

The “white paper” noted that industries that should be developed in parallel with tourism included the marina industry, education industry, health and wellness industry, tuna export industry, local food industry, and sports and events.

“These industries have both opportunities and obstacles,” the report said.

However, the white paper indicated that proper development of the alternative industries, in collaboration with the private sector, could help to contribute up to B350bn a year to the island’s economy.

“The income generated can also be distributed to local communities and create job opportunities in the area,” the report added.

Governor Narong, who arrived on the island to take up the post as Governor only last Friday (June 19), welcomed the suggestions.

“I am happy to hear all comments that lead to problem-solving and the development of Phuket, with the government, private sector and the people all working together,” he said.

“I will act as a leader and a supporter, as Phuket is now going through a most difficult situation,” he added.

Governor Narong also visited the Phuket Social Security Office on Friday, though it was not reported what he was informed of there.

Social Security Office (SSO) Secretary-General Todsapol Krittawongwiman was in Phuket in person a month ago (May 27) to support the work of social security officials on the island.

“I came to inspect the working and management of the Phuket office, as I was informed that around 100,000 people registered to receive relief funds as they have been affected by the economic impact of COVID-19,” Mr Todsapol said.

“Every day, around 1,000 people come to the office to register. One thousand people per day is the highest number in Thailand,” he added.

However, Mr Todsapol also said that 80% of the 100,000 or so people on the island who had registered to receive COVID-relief support payments from the SSO had already received those payments.

That was not the case a week earlier when workers from Patong’s nightlife industry, left out of work and without any income to support themselves, staged a protest in front of the Social Security Office in Kathu.

Phuket Chamber of Commerce President Thanusak Pungdet earlier this month asked for social security payments for unemployed to be extended for further three months as the money provided by the government was already running out, leaving people left jobless without any form of income.

That was on June 10. Weerawit Kreuasombat, President of the Patong Entertainment Business Association (PEBA), confirmed on Tuesday (June 23) that no officials had contacted him about the extra social security support for former entertainment industry workers left without any income.

Courtesy: Published at The Phuket News on June 27, 2020

Read More

Phuket Hotels Association looks to reboot island tourism with ‘Imagine Phuket’ campaign

25/06/2020

PHUKET: In Asia’s first international destination recovery initiative post-COVID-19, the Phuket Hotels Association and global hospitality branding agency QUO have joined forces to craft an aspirational relaunch campaign aimed at reviving travel to Phuket.

The Imagine Phuket campaign focuses on the sights, sounds, feelings, tastes and – most importantly – emotions that Phuket evokes in fans around the world, making them yearn for all they have missed during the global pandemic.

Motivated by a desire to restore the island’s tourism industry and save jobs, Phuket Hotels Association kicks off the campaign with a fresh logo and video, designed to evoke in travellers how incredible it will feel when they can share a perfect vacation with loved ones again.

The initiative enables island hotels to come together with one voice and one message. Each property will be given the creative resources to personalize videos, images and logos with their own branding, creating bespoke versions of the campaign’s inspiring message. By reaching the combined audiences of 75 participating hotels in the private sector, there is the rare opportunity for authentic, large-scale virality.

Phuket has been one of the hardest-hit destinations in Thailand, and hotels have struggled to reopen.

In a press conference on June 10, Phuket Chamber of Commerce President Thanusak Phungdet told reporters that COVID-19 had already cost the island over B120 billion (US$3.88bn) in lost income, with losses expected by to reach B280bn (US$9.055bn) by the end of the year if the situation doesn’t improve. But despite unemployment increasing by over 34% YoY, according to local reports, island residents remain resilient. This campaign seeks to be the first small step toward recovery.

With Phuket Airport open, and Thailand poised to reopen to international travel this summer, Imagine Phuket reminds viewers of the flavours of Thai food, the dreamlike limestone karsts of the landscape, the beguiling smiles and the feeling of freedom that comes with every visit to Phuket.

“Phuket is the leading resort destination in Asia and one of the most loved resort destinations anywhere in the world,” says Anthony Lark, president of Phuket Hotels Association. “Our members have come together with QUO to create a campaign, in both English and Thai, to evoke the soul of the destination,” said Lark.

As Asia’s most-visited island destination, with over 10 million arrivals last year, Phuket is among the first to embark on a significant relaunch. In the months after reopening, Phuket’s hotel industry is hoping that it will be able to attract many of Thailand’s 20 million domestic travellers.

“The Imagine Phuket video, and integrated social media campaign, are designed to drive emotion,” said QUO CEO David Keen. “We know that there is a massive desire to travel again, both locally and internationally. Our intent is to bring the story back to Phuket.”

Aimed at the international market, the campaign will reach the audiences of the best-known hotels in Phuket. From signage to buttons to long and short videos, each hotel will invite the world to dream, plan, envision and – above all – to Imagine Phuket with hope and anticipation.

Courtesy: Published at The Phuket News on June 25, 2020 by PR

Read More

Can digital taxes help fund the COVID-19 recovery in emerging markets?

25/06/2020

With digital payment services and streaming platforms experiencing rapid growth during the coronavirus pandemic, governments in emerging markets are looking at introducing digital taxes as a way of expanding state revenue.

The pandemic and associated lockdowns have caused commerce to shift online, as consumer purchases are increasingly made through digital channels. Meanwhile, streaming networks have seen a significant uptake in traffic over the first few months of the year, as have online conferencing services.

In light of these trends – and the significant economic pressures associated with the virus – governments have been looking to enact or update digital tax policies to better reflect shifts in consumption patterns.

Worldwide Momentum

In July Indonesia imposed a 10% value-added tax (VAT) on digital products sold by foreign companies. This tax covers streaming services – such as those offered by Spotify and Netflix – as well as applications and digital games.

The Indonesian government expects state revenue to drop by 10% this year, leading to a fiscal deficit of 5.1% – the largest in a decade. However, given that the country’s booming digital economy is expected to generate revenues of $130bn by 2025, the tax could significantly boost state coffers as officials look to support post-pandemic growth.

This development followed similar moves in India, where the government introduced a 2% tax on digital services provided by foreign companies. While covering streaming services, the law also taxes e-commerce revenues on sites such as Amazon.

Going forward, the government in the Philippines is reviewing a proposal that would tax online shopping, social media advertisements and video and music streaming, while similar proposals have been advanced in Kenya.

Digital taxation is also gaining traction in developed markets. France, which had been debating a tax on digital services for several years, announced in May that it would implement a levy by the end of the year.

Pre-coronavirus measures

Although the economic fallout of the pandemic has accelerated the introduction of taxes on digital services, some countries had already taken steps in this direction prior to the outbreak of COVID-19.

For instance, Malaysia introduced a 6% digital tax on January 1, while Singapore also expanded its good-and-services tax (GST) to include digital services at the beginning of the year.

Elsewhere, Norway was one of the first to include digital services in VAT rules back in 2011, at a rate of 25%.

This was followed by similar moves in New Zealand, which extended its 15% GST in 2016, and Russia, which introduced a digital tax of 18% in 2017 that has since been revised upwards to 20%.

Opposition to tax reform

Such attempts to tax digital services have faced some opposition  – both before and during the pandemic. This has largely come from the US, where most of the world’s largest digital firms are based.

In June the US Trade Representative, the government agency responsible for developing trade policy, announced that it was launching probes into a number of countries and trade blocs for implementing or planning to introduce new taxes on digital companies.

The country is investigating Austria, Brazil, the Czech Republic, the EU, India, Indonesia, Italy, Spain, Turkey and the UK amid concerns that taxes have been specifically crafted to target US companies such as Apple, Facebook, Google and others.

Furthermore, in mid-June international media reported that the US had suspended talks with France, Italy, Spain and the UK over proposed changes to global taxation law, warning that they could face increased tariffs if they pressed ahead with digital taxation plans.

The dispute threatens to derail international efforts to implement a new global tax framework for tech companies.

Prior to COVID-19 the Organisation for Economic Cooperation and Development (OECD) had been working with nearly 140 countries to rewrite global tax rules in response to the rising prominence of tech firms over the past few decades.

New Digital Platforms Emerging

Parallel to this, the ongoing boom in digital services has led to an increase in local options in emerging markets.

In June GoPlay, the video streaming service of Indonesia’s multi-purpose app GOJEK, announced that it had secured funding from Singapore’s Golden Gate Ventures and Chinese investment firm ZWC Partners. Although officially undisclosed, regional media reported the funding was to the tune of $15m.

This development is a seen as a vote of confidence in GoPlay, which was launched in September last year.

Elsewhere, telecoms company Airtel Nigeria expanded into television services in January following the launch of its Airtel TV platform.

While there has been growth in some streaming services during the period of COVID-19 restrictions, that demand has not always translated into profits.

Regional media reported earlier this month that the Malaysian-headquartered, pan-Asia streaming service iflix is in talks to sell its operations amid persistent losses and debt troubles, while the company has ended its streaming operations in Bangladesh.

Notwithstanding such cases, the proliferation of local digital options is a positive indication of the digital economy growth potential in emerging markets.

Courtesy: Published at The Phuket News on June 25, 2020 by Oxford Business Group

Read More