Thailand to weigh tax on gold trades to slow baht rally

[BANGKOK] Thai authorities are reported to be considering a tax on physical gold trading to slow a rally in the nation’s currency that has threatened exports and tourism. The baht fell the most in six weeks. 

The Bank of Thailand and Ministry of Finance are discussing ways to tax gold bought and sold through various online channels and settled in baht, according to people familiar with the matter. Any such levy may exempt gold traded in US dollars, on futures exchanges, or purchases made from bullion shops, the people said.

With the tax, authorities aim to reduce exports of gold and make it more expensive for Thais to own the precious metal, the people said, adding dollar inflows tied to bullion shipments were among the factors strengthening the baht. 

The baht dropped as much as 0.6 per cent to 31.92 to a dollar after the report, the most since July 31.

Thailand’s gold exports soared 69 per cent to 254 billion baht (S$10.2 billion) in the first seven months of 2025 from a year earlier, with an unusual jump in shipments to Cambodia sparking demands for a probe. Global bullion prices have rallied nearly 40 per cent this year.

Representatives for the finance ministry and central bank didn’t immediately respond to request for comments.

Earnings from gold exports helped fuel the baht’s rally to a 2021 high last week, with its 7 per cent surge this year prompting calls for stronger central bank intervention to protect exports and tourism.

BOT officials are scheduled to meet representatives of gold-trading companies on Monday to discuss the metal’s impact on the baht and ways to tighten reporting of transactions. The finance ministry will also hold more talks with the central bank, and a decision will be made only after a new Cabinet takes office, the people said, adding the levy may be introduced as a special business tax.

If gold sellers convert dollar proceeds to baht, the transaction may be taxed, the people said, adding the rates of any levy have yet to be finalised.

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The central bank has attributed the baht’s gains largely to dollar weakness and external factors, while pledging to intervene in the market to curb any excess volatility. The currency typically gets a boost when Thais sell gold, which is highly valued as an investment, as dollar proceeds get converted into the local currency. 

A stronger baht is hurting Thai exports and tourism, which together account for 70 per cent of the nation’s gross domestic product. Exporters are already reeling after the country’s shipments were hit with a 19 per cent US tariff last month, while foreign tourist arrivals are down, partly due to the stronger currency and safety concerns among Chinese visitors.

Gold holds deep cultural and historical significance in Thailand, where it is often offered at Buddhist temples and regarded as a traditional way to save and pass down wealth. Demand jumped 13 per cent last year, making Thailand the only country to record four consecutive years of growth through the Covid pandemic, according to YLG Bullion International, citing World Gold Council data.

Thais buy almost 70 per cent of gold through various online platforms, according to MTS Gold Group, one of the country’s largest bullion dealers. Gold demand in Thailand, which meets most of its demand through imports, is forecast to jump for a fifth straight year to 53.7 tons in 2025. BLOOMBERG