Thailand Urged to Tap Domestic Wealth, Not Just Tourists

Thailand's government has decided, like Japan and others, that the quality of the tourists it attracts is far more appealing than the quantity. After receiving just 33 million foreign arrivals to the Kingdom this year, far below the record 40 million it recorded in 2019, Thailand is betting that a smaller number of more wealthy tourists can generate the same amount of revenue. It is seeking to attract them in part by providing “meaningful experiences” for the rich in the form of golf resorts, wellness retreats, fine dining, and luxury packages. Thailand is suffering not only from a decline in tourism volume, as a strong baht, a rising Vietnam, and an ugly transnational crime problem have hampered interest, but also from the fact that its solution to the problem is a loser, as there are other wealthy people to “soak” right at home. Part of the issue is that Thailand’s current tourism infrastructure is built for high volume, not for an exclusive few. Twenty percent of the Thai economy depends on tourism – a large part of which is those who cater to it, including tuk-tuk drivers, tour operators, small hotels, and locally-owned restaurants. Combined, they represent the beating heart of ubiquitous destinations like Chiang Mai, Phuket, and Pattaya. Consequently, making a sharp pivot toward people who would never frequent or purchase services from these local operators would worsen the economy and drive upward an already staggering rate of income inequality. This inevitably means that the small business owner and the thousands of people who operate in the informal sector of the Thai economy would be at risk. Thus, pursuing the same strategy as Singapore and Japan – two very different economies – seems foolish, particularly as other countries in Southeast Asia are now following the same strategy, making it an extremely competitive market. Instead, Thailand should focus on the wealth it already has, which is enough to counter the loss of tourism volume. There’s an extraordinary amount of data on the subject, which appears to be ignored by the would-be affected political elite. The 2026 World Inequality Report found that inequality in Thailand has soared over the past decade, with the top 10 percent of earners capturing 52 percent of total income, while the bottom 50 percent received only 11 percent. Furthermore, 65 percent of all wealth is concentrated in the hands of the top 10 percent, while the top 1 percent hold 32 percent. An earlier 2023 World Bank report showed similar numbers, ranking Thailand among the most unequal countries in the Asia-Pacific. In contrast, Thailand’s regressive tax system doesn’t match this disparity. Personal income tax allowances remain high enough that the International Monetary Fund (IMF)’s 2025 consultation on Thailand strongly recommended that streamlining personal income tax allowances, while keeping standard allowances (for dependents and personal spending) and keeping the tax exemption threshold at 150,000 baht ($4,500) could increase GDP by 0.5 percent annually. Increasing tax compliance alone could increase GDP by 0.3 percent. The message has been on repeat for years, with the IMF concluding in its earlier 2023 consultation that Thailand required greater tax progressivity as a way of addressing poverty and inequality. It isn’t that Thai leaders are unaware of the issue. There have been revisions to tax loopholes that allowed residents to receive income offshore to avoid Thai taxation, but the Revenue Department created a gentler version where it allowed the wealth to sit in more than 2 trillion baht in offshore assets. In other words, Thailand knows where real revenue is; it is just not inclined to enforce the taxation of it. Regardless of tax fairness, Thailand should pursue all revenue opportunities that it can, but it is no long-term solution when Japan, Singapore, Vietnam and likely many others will be courting the same type of well-heeled traveler, with Thailand in a much more precarious position than its competition. Tax fairness is a far better approach to a steady increase in government revenue, but it seems that this message has fallen on deaf ears among the tourism and finance authorities. As some may recall, there were attempts at progressivity in the Land and Building Tax Act, but the military-appointed National Legislative Assembly conveniently watered down the rate so that it would not have a dramatic impact on the rich. An older, but more revealing study by veteran researchers Chris Baker and Pasuk Phongpaichit found that the top 10 percent hold 61 percent of land, while the bottom 10 percent own just 0.1 percent. The wealthy cannot really be counted on to rein in a runaway system of inequality. If Prime Minister Anutin Charnvirakul is serious about raising government revenue, there are far more reliable ways of doing so. However, a man whose own wealth exceeds $124 million, and includes three private jets, is not going to prioritize a revenue structure that hurts his own interests – and those of his fellow elites.