Ketmanee: Cosmetics contribute to GDP
The Thai Cosmetics Manufacturers Association (TCMA) has urged the Finance Ministry to revise its plan to temporarily waive import tax on make-up items early next year, saying it will hurt small local producers.
The ministry hopes to boost consumer spending in January and February by waiving import taxes on cosmetics and fragrances for two weeks.
The government wants to see from the trial scheme if the zero import tax will lower the price of foreign cosmetics during the two weeks and if foreign tourists and local people will spend more.
"We don't agree with this plan as it will severely hurt local cosmetics brands and small producers," said Ketmanee Lertkitcha, the TCMA president.
Currently, the import volume of foreign cosmetics brands continues to increase even though the government collects about 5-10% import tax on cosmetics.
The import volume of foreign cosmetics went up 20% in 2015 and is expected to rise to 30% this year.
"If the government slashes import tax on cosmetics and fragrances to zero, international cosmetics companies will not come to invest here. Now they can easily export their cosmetics to sell in Thailand," she said.
Thailand's cosmetics industry was worth over 260 billion baht last year with 7,000 local cosmetics manufacturers. Of the total, about 97 billion baht was from exports and the balance was from domestic sales.
In the first nine months of this year, the cosmetics industry grew by 5% year-on-year.
The association expects cosmetics' export volume will rise to 106 billion baht this year. The majority of Thai cosmetics is shipped to Japan, Europe and Asia.
"The cosmetics industry contributes a lot to the country's GDP, therefore the government should put more effort to support Thai SMEs which cannot find channels to sell their products in the local market," Ms Ketmanee said.
She also said the government should also support SMEs' brand building and general packaging development.
"Apart from product development, the government should promote Thailand as a hub of natural ingredients for cosmetics production, which will help to enhance the value of Thailand's cosmetics industry," Suttisak Wilanan, deputy managing director of Reed Tradex Co, the event organiser of Cosmex 2016.
Ms Ketmanee said manufacturers in Thailand have the potential to produce cosmetics, which can be realised if the government puts serious focus into supporting them.
Currently, Thailand's cosmetics industry is the biggest in Asean and ranks third in Asia after Japan and South Korea.
Mr Suttisak said the company will organise Cosmex 2016 during Nov 8-10 at Bitec Bang Na, showcasing new technologies for cosmetics manufacturing.
"Investors from Indonesia, Malaysia and South Korea are also interested in exploring opportunities in Thailand," he said.
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