The Ministry of Finance is likely to maintain the value-added tax (VAT) rate at 7% for the next one to two years. This was announced by Krisada Chinavicharana, Director-General of the Fiscal Policy Office.
Under the Thai Revenue Code, the standard VAT rate is set at 10%. However, a temporary reduced rate of 7% has been in effect, with its validity previously set to expire on September 30, 2015.
Earlier, the Ministry of Finance indicated that VAT might be increased by one percentage point during the year to help address the budget deficit.
In response, representatives of the private sector expressed concern, citing already low levels of consumer spending in the country.
To support the business sector, the Ministry of Finance instructed the Revenue Department to reduce its annual tax collection target from 197 billion baht to 160 billion baht.
Additionally, the Fiscal Policy Office proposed reducing the withholding tax rate from 3% to 2%. According to Krisada Chinavicharana, “Reducing the tax burden will improve taxpayers’ financial position and encourage higher spending.”
Source: Bangkok Post