October 16, 2025
BANGKOK – The Thai government’s Economic Cabinet has approved a substantial package of fiscal stimulus measures aimed at reviving the country’s slumping tourism sector and accelerating economic growth.
The Finance Ministry is scheduled to propose the package to the full Cabinet next week.
The announcement followed the first meeting of the Economic Cabinet under Prime Minister Anutin Charnvirakul’s government on Wednesday, convened to finalise the economic policy direction for the coming four months.
Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas confirmed that the stimulus is urgently needed, noting that domestic tourism had contracted by 8% over the past eight months.
He expects the year-end economic measures to contribute an additional 0.4% to GDP growth.
Three Pillars of Tourism Stimulus
The comprehensive tourism package consists of three main components:
Tiered Tax Rebates: Individuals will be eligible for a personal income tax deduction of up to 20,000 baht on travel expenses. This deduction will be set at 1x for travel to major cities, but is increased to 1.5x for travel to promote secondary cities. The measure will be effective from 29 October to 15 December 2025.
Accelerated Public Sector Spending: The Cabinet is mandating that central government agencies, state enterprises, and local administrative bodies must disburse 60% of their allocated seminar and training budgets—totalling approximately 6 billion baht—by January 2026. This rapid injection of funds is intended to stimulate the service economy sooner than the typical third or fourth quarter expenditure.
Hotel Renovation Incentives: To boost the quality of accommodation in secondary cities, hotels and lodgings will be granted a double (2x) tax deduction on renovation expenses. This relief, available until March 2026, covers costs related to upgrades like installing air conditioning, solar panels (for sustainability), and setting up wastewater treatment systems.
The Finance Ministry is also reviewing a separate proposal from the Chamber of Commerce that would allow corporate entities to deduct expenses for employee domestic travel. Separately, the government is considering a measure to cut the tax on entertainment venues from 10% to 5% to encourage operators to enter the formal tax system.
Tacking Budget Disbursement Crisis
A major focus of the meeting was the historically low disbursement rate of the national budget.
Last year saw an unprecedented surplus of over 300 billion baht undisbursed, with investment spending only hitting 65%.
For the 2026 budget (over 3.78 trillion baht), the government has set aggressive new targets: 93% for the general budget and 75% for the capital investment budget.
These targets will be designated as Key Performance Indicators (KPIs) for the heads of all government agencies, with the Cabinet Secretary-General monitoring compliance monthly.