She said tourists were among the biggest shoppers for gifts during the holiday season, so the tax incentive, effective from today through December, should give a powerful boost to both tourism and retail spending in this period.

For those living in Thailand, each person is entitled to get a tax refund on shopping expenses of up to Bt15,000 depending on his or her income-tax rate. But the tax incentive does not apply for alcoholic beverages, cars, motorcycles, boats or fuel.

Earlier, the government also approved tax incentives for domestic tourism, which allow travellers to get a tax refund on travel costs of up to Bt30,000 per person – covering airline and other transport, hotel rooms and other expenses.

These measures are intended to help revitalise the economy as the export sector, which accounts for 70 per cent of Thai gross domestic product, has been hit by global economic uncertainties.

Kobsak Pootrakool, vice minister at the Prime Minister’s Office, said the tax incentive for shopping benefited about a million Thais last year, when the measure generated an additional retail spending of nearly Bt10 billion during a one-week period. However, this year’s tax incentive covers two weeks, so more people were expected to take advantage of the move, which is expected boost retail spending by about Bt20 billion.

According to Kobkarn, about 25-30 per cent of holidaymakers will shop, especially during the Christmas and New Year holidays, when there will be a series of government-sponsored tourism and related events, including those at destinations in the North that have development projects by the late King.

Meanwhile, Sompong Rungnirattisai, commercial director of Tesco Lotus, a major retail chain, said the government’s tax incentive for shopping would lift overall consumer sentiment and have a positive impact on consumer spending.

He said Tesco Lotus was ready to issue the necessary receipts for the tax refund, which will coincide with the chain’s “United Hearts” campaign to help customers cut their living costs.