Thailand‘s VAT Rate To Remain At 7% For Another Year
Value added tax (VAT) in Thailand will be kept at the current rate of 7% for another year, Revenue Department Director General Prasong Poontaneat confirmed earlier this week.
Mr Prasong said that, according to an announcement published in the Royal Gazette on Oct 2, the VAT rate will remain at 6.3% while the local tax will also remain unchanged at 0.7%, thereby making it 7% in total.
According to the announcement, while the current 7% VAT on goods and services will remain unchanged until the 30th September 2018, from the 1st October 2018, the VAT rate is expected to increase to 10% which will be made up of 9% VAT and 1% local tax.
If the VAT rate was increased to 10%, the government would get an increase of 232 billion baht in revenue for fiscal 2018.
The cabinet passed a resolution in August to keep the VAT rate at 7% for fear that any increase might adversely effect the retail and production industries as well as imports and private investment.
VAT was first introduced in Thailand in 1992 at a rate of 10%, but was later slashed to 7% at the request of business operators. When it was originally introduced, a maximum ceiling of 10% was also agreed upon to protect consumers and business owners from excessively sharp increases in the tax.