Thailand plans to impose taxes on gold transactions to curb the impact of the appreciation of the Thai baht on exports and tourism

The Thai government is considering taxing physical gold transactions in an effort to curb the rapid appreciation of its currency, aiming to protect the export and tourism sectors affected by this trend.

According to a report by Bloomberg on the 15th, citing informed sources, the Bank of Thailand and the Ministry of Finance are discussing taxing gold traded through various online channels and settled in Thai baht. The source added that such taxation may exempt gold traded in US dollars, traded on futures exchanges, or purchased at gold and silver shops.

By imposing this tax, the Thai government hopes to reduce gold exports and increase the cost of gold holdings for Thai citizens. The informed source noted that the inflow of US dollars related to gold transportation is one of the reasons driving the appreciation of the Thai baht.

Following the news, the Thai baht fell against the US dollar, with a decline of up to 0.6% to 31.92, marking the largest single-day drop since July 31.

Strong gold export revenues propelled the baht to a high not seen since 2021 last week. So far this year, the baht has appreciated by 7%, leading to increasing calls for the central bank to take stronger intervention measures to protect exports and tourism.

Tax details still under discussion, some transactions may be exempt

The implementation details of the new tax are still under discussion. Reports indicate that the Bank of Thailand and the Ministry of Finance will hold more talks, but the final decision will be made only after the new cabinet takes office. This tax may be introduced as a form of "special business tax."

Informed sources stated that as long as gold sellers convert their dollar earnings into Thai baht, the transaction may be subject to taxation. However, the specific tax rate for any tax has not yet been finalized.

Officials from the Bank of Thailand plan to meet with representatives from gold trading companies on Monday to discuss the impact of gold trading on the baht and methods to strengthen trading reports.

Surging gold exports boost baht strength

Data from the Thai Customs Department shows that in the first seven months of 2025, Thailand's gold export value surged by 69% year-on-year, reaching 254 billion baht (approximately 8 billion USD). Notably, exports to Cambodia have seen an abnormal increase, prompting calls for an investigation.

When Thai investors sell gold, they typically convert the US dollar earnings into local currency, a process that drives up the baht's exchange rate. The Bank of Thailand has attributed the baht's appreciation mainly to the weakening of the US dollar and external factors, while promising to intervene in the market to curb any excessive volatility.

A strong baht is harming Thailand's two major economic pillars—exports and tourism, which together account for 70% of the country's GDP.

Last month, the country's exported goods were just hit by a 19% tariff from the US, and the number of foreign tourists entering the country has also declined due to the strong baht and concerns over safety issues.

One of Thailand's largest gold traders, MTS Gold Group, stated that nearly 70% of gold purchased by Thais is done through various online platforms. Thailand's gold demand largely relies on imports, and it is expected that the country's gold demand will grow for the fifth consecutive year in 2025, reaching 53.7 tons