Part one of a three-part series for Fair Tax Week 2026.
This week is Fair Tax Week. From 21 to 28 June, the Fair Tax Foundation and a growing community of businesses across the UK, Europe and now beyond are doing something that ought to be ordinary but somehow still feels radical: celebrating the companies that pay the right amount of tax, in the right place, at the right time, and saying so out loud.
It is worth pausing on how unusual that is. Most corporate communication treats tax as a cost to be managed down, a number for the finance team to optimise, a subject best kept well away from the marketing copy. Fair Tax Week starts from the opposite premise, that paying your fair share is something to be proud of, and that the businesses doing it deserve recognition rather than silence. The Fair Tax Foundation has spent more than a decade building the framework that makes that recognition credible, and the accredited businesses now carrying the Fair Tax Mark, contributing billions in corporate income tax between them, are proof that responsible tax conduct and commercial success are not in tension. We want to add our voice to that celebration, and over the course of this week we will make a case that we think the tourism industry has been avoiding: that corporate tax conduct is one of the most overlooked dimensions of sustainability in travel, and that the way our industry talks about being “sustainable” has quietly left it out.
The pillar everyone forgets
Ask most people what sustainable tourism means and they will describe something environmental: less plastic, lower carbon, protected reefs, responsible wildlife encounters. That is not wrong, but it is incomplete, and the incompleteness matters.
The recognised global definition, set out by the UN Environment Programme and the UN World Tourism Organization and adopted by the Global Sustainable Tourism Council, rests on three dimensions that are meant to be held in balance: the environmental, the socio-cultural, and the economic. The GSTC organises its entire standard around four pillars, and one of them, sitting right alongside the environmental one, is the socio-economic: maximising the social and economic benefits to the host community and minimising the harms. Economic sustainability is not a footnote to the environmental story. It is supposed to be a co-equal pillar.
In practice, it has become the poor relation. The environmental pillar has the metrics, the targets, the carbon calculators, the certifications and the marketing. The economic pillar, when it appears at all, tends to be reduced to local hiring and buying from local suppliers. Both of those things matter, and at least they are partially visible. But they sit at the edge of the real question, not the centre of it. The centre of economic sustainability is a simpler and harder question: of all the money a visitor spends, how much is genuinely retained in the country they came to visit?
That question turns out to be remarkably difficult to answer, and the difficulty is the point. A destination management company is a low-margin, low-asset services business, and the international groups that dominate the premium end of the market are often structured so that the revenue from a trip is recognised offshore and never fully lands in the destination at all. The local entity can be left looking small and barely profitable by design, which makes the eventual corporate tax bill modest almost by construction. Whether profit is shifted out after it is booked, or revenue is diverted before it is ever booked locally, the outcome is the same: less value retained in the host country than the size of the visitor’s spend would suggest. We will look at exactly how this works in part two.
This is the heart of the case we want to make this week. A genuinely sustainable tourism business contributes to the long-term economic health of the places it operates in, and a central measure of that is how much of the value it generates actually stays. Tax is not the whole of economic sustainability; wages, local procurement, VAT and other contributions all matter, and none of them should be dismissed. But if a company’s tax contribution is absent or invisible, any claim to economic sustainability is incomplete. Corporate income tax is not necessarily the single largest of these flows; in some businesses local procurement may be larger. What sets it apart is that it is uniquely verifiable: tax paid in the country where value is created is money that demonstrably stays, on the public record, funding the public goods the destination depends on. It is the contribution that is hardest to fake and easiest to check, which is exactly why it belongs at the heart of any honest account of economic sustainability.
And yet it has been almost entirely absent from how the industry defines, certifies and markets sustainability. Worse, much of what would let anyone measure genuine local retention is deliberately obscured. Opaque beneficial ownership, nominee shareholders and cross-border structures mean that, for a great many operators, it is simply not possible to tell from public records how much value stays in the destination and how much leaves. A standard that claims to certify economic sustainability while leaving that question not just unanswered but unanswerable is not measuring the thing it says it measures. It was partly to make local retention visible and verifiable that we began developing our own economic-transparency work, which we will say more about later in this series. For now the point is narrower: we have built an elaborate apparatus for measuring a company’s environmental conduct, and left the central question of its economic conduct, how much it genuinely leaves behind, almost entirely in the dark.
Why corporate income tax, and why here
To see why this matters so much in a place like Thailand, you have to look at where the country actually sits fiscally, and the picture is more nuanced than the headlines suggest.
There is a threshold that the IMF, the OECD and the World Bank all treat as a rough line of fiscal viability: a country needs to collect somewhere around 15 percent of its GDP in tax to fund the public services and infrastructure a modern economy depends on. Thailand is above that line, but not comfortably clear of it. On the World Bank’s measure, Thailand collected 15.4 percent of GDP in tax in 2023. On the OECD’s broader measure, which includes all levels of government, the figure sits at around 16 to 17 percent, and the OECD records Thailand’s lowest point of the past decade as recently as 2021, against a high of 19.3 percent back in 2013. Different institutions use slightly different methodologies, so the precise figure varies, but the estimates cluster in the 15 to 17 percent range, and the direction of the story does not change: Thailand sits close to the line economists treat as a floor, rather than comfortably above it.
Here is the part that deserves more attention than it gets. Across the Asia-Pacific region, tax revenues have been recovering strongly from the pandemic. The OECD reports that the regional average tax-to-GDP ratio rose for the third consecutive year in 2023 and is now back above its pre-pandemic level. Several of the economies driving that recovery are Thailand’s tourism-dependent neighbours: the Maldives, Fiji and Vanuatu were among the strongest gainers, with the OECD attributing the increases in part to a rebound in tourism. Thailand is not in that group. The World Bank’s own assessment is blunt about the shortfall: Thailand collects around 15.7 percent of GDP in tax, which it judges to be “considerably below the efficiency frontier given Thailand’s income level,” with an estimated tax gap of 5.6 percent of GDP. That is a large amount of uncollected revenue for a country with development needs as pressing as Thailand’s.
This is not the story of a poor country struggling to fund primary schools. It is the story of an upper-middle-income country that needs fiscal strength precisely now, to fund its energy transition, adapt to a changing climate, support an ageing population, protect the marine and natural environments that millions of visitors come to enjoy, and build the climate-resilient infrastructure that mass tourism puts under strain. These are the things a healthy tax base pays for, and the things a stagnant one cannot. They are also, almost every one of them, the very outcomes the Sustainable Development Goals describe. Tax is how a country funds its own development. It is the most sustainable source of development finance there is, because unlike aid it does not depend on anyone else’s generosity.
And corporate income tax carries unusual weight in an economy like Thailand’s, for two reasons.
The first is dependence. Developing and emerging economies rely on corporate income tax far more heavily than rich ones do, and Thailand sits at the high end of that pattern. The OECD’s Corporate Tax Statistics 2025 places Thailand among the minority of jurisdictions worldwide where corporate income tax makes up more than a quarter of total tax revenue, against an Asia-Pacific average of 21.3 percent and an OECD average of just 12 percent. Wealthy economies have broad personal income tax bases, deep social security systems and diversified revenue to fall back on. Thailand leans more heavily on the tax that companies pay on their profits than almost any advanced economy does. So every dollar of corporate tax that goes uncollected, whether through generous incentives or through profit shifting, lands harder here than the same dollar would in Germany or France.
It is worth being precise here, because the point is easy to misread. Thailand is not bad at collecting corporate tax in aggregate. The World Bank notes that Thailand actually outperforms its upper-middle-income peers on corporate income tax revenue, with high collection efficiency it attributes to good compliance. That is exactly why the sector-level question matters so much. A country can collect corporate tax well overall and still have an entire industry segment, in this case the international operators in its tourism sector, structured so that very little taxable profit ever appears on the local books. National averages will never reveal that. Only looking at the sector, and at individual firms, can.
The second reason is less obvious but, we think, more important. New research from the United Nations University’s World Institute for Development Economics Research, examining 102 countries over more than half a century, finds that across low- and middle-income economies, taxation of capital, which includes corporate income tax, tends to go hand in hand with stronger rule of law and clearer, better-enforced property rights. The relationship is not that good institutions produce tax; it is that the bargain around capital taxation, the obligation to pay and the transparency that comes with it, is part of how accountable institutions get built in the first place.
This is not a claim that Thailand has already arrived. It plainly has not. Thailand’s score on Transparency International’s Corruption Perceptions Index slipped again in 2024, and the country is in the middle of a difficult crackdown on nominee shareholding arrangements, the very structures used to disguise who really owns and profits from a business. These are not reasons to set the argument aside. They are the argument. A country still working to enforce its own ownership-transparency rules, and still struggling with public-sector integrity, is precisely a country for which the revenue and the transparency that responsible corporate tax conduct brings are most valuable, and most fragile. When companies operating in a destination arrange their affairs to minimise the tax they pay and obscure the profit they make, they are not only depriving the country of revenue for roads and hospitals. They are deepening exactly the opacity that makes the institutions weaker. That is about as clear a definition of unsustainable as one could write.
The money tourism leaves behind, and the money it takes with it
There is a particular irony in tourism’s place in this. Tourism is one of the largest forces in the Thai economy, contributing close to a fifth of GDP once its wider effects are counted. A sector that looms this large ought to be one of the largest contributors to the tax base. Whether it actually is depends entirely on where the value it generates is allowed to come to rest, and a great deal of it is structured to come to rest somewhere else. We will examine exactly how in part two.
For now, consider how the burden of paying for tourism is currently distributed, because it tells you a lot about where the political effort goes. On 20 June, the day before Fair Tax Week began, an increase to the international departure charge at Thailand’s main airports took effect, taking it to 1,120 baht per passenger, to help fund airport upgrades. It is collected through the airfare and falls on every departing traveller. The change moved from announcement to implementation without much friction. We have no quarrel with it; airports do need investment. But set it beside another number. For more than four years Thailand has been trying and failing to introduce a modest 300-baht tourism fee to fund tourism development and community projects, repeatedly shelved on the logistics of collection and on private-sector resistance. Industry estimates have put the potential yield of that fee at somewhere in the order of 10 to 11 billion baht a year at full visitor numbers, a known and finite sum. The charge that falls on the traveller at the gate can be raised in a day. The levy meant for the destinations and communities that host those travellers has been stuck for years. And the corporate income tax actually paid by the operators profiting from those travellers is a figure nobody can even state with confidence, because, as we will see, so much of it is arranged to fall outside the country altogether.
The pattern is the same one the wider argument keeps running into. The cost keeps being passed to the visitor. It rarely settles on the balance sheets of the companies profiting most from the visit. That is a question of economic sustainability, and it is precisely the question our industry’s sustainability frameworks have been quietest about.
The global backdrop, briefly
Thailand’s situation is not unique, and it is worth a moment of context.
The United Nations estimates that developing countries face an annual financing gap of around 4 to 4.2 trillion US dollars to meet the Sustainable Development Goals, a gap that has grown by more than half since the pandemic. Set against that need, the scale of corporate tax that simply goes missing is striking. The Tax Justice Network’s State of Tax Justice 2024 calculates that countries lose 492 billion dollars a year to cross-border tax abuse, of which 347.6 billion is lost specifically to multinationals shifting profits offshore to underpay tax. That single stream, if recovered, would cover close to a tenth of the entire global SDG financing gap, every year. These are global figures, but they are built from thousands of individual decisions taken in individual countries, including Thailand, by companies deciding where their profits should be recognised and how much tax they are willing to pay where they actually operate.
Where this series is going
Over the next two pieces, we will connect these fiscal realities to the way the international tourism industry actually works.
In part two, we will look at the architecture of the inbound tour operator and destination management business: how the value generated by a visitor’s trip to Thailand can be recognised, booked and taxed almost anywhere except Thailand, what Thailand’s own tax authority has built to push back, and what the hard evidence from a neighbouring tax administration tells us about how widespread the problem really is.
In part three, published to coincide with an announcement we are proud of, we will return to where this piece began, the sustainability certifications themselves, and look closely at what GSTC, Travelife and B Corp actually ask of a tour operator on tax. The answer, with one very recent and narrowly drawn exception, is almost nothing, and we think that tells you something important about how seriously the industry has taken the economic pillar it claims to stand on.
For now, in the spirit of Fair Tax Week, we simply want to say this. The businesses paying their fair share, here and everywhere, are doing something that matters more than they are usually given credit for. They are not just following the rules. They are funding the future of the places they operate in, which is one of the clearest and most verifiable forms of sustainability there is. That is worth celebrating, and this week, we will.
This is part one of a three-part series. Part two looks at how the structure of international tourism extracts value from host destinations before tax can apply. Part three examines what the major sustainability certifications actually require on tax conduct, and announces a first for the international tourism sector.