Thailand's Senate committee has proposed a tax reform plan to tackle the country's fiscal deficit, suggesting an increase in value-added tax (VAT) from 7% to 10%. Chaired by Kamphol Supapaeng, the Economic, Financial and Fiscal Affairs Committee met on April 19 to discuss these measures aimed at easing long-term fiscal pressures. If approved, the proposals will be submitted to the Cabinet for potential implementation.
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Thailand has faced budget deficits averaging 4% of GDP over the past decade, surpassing the fiscal sustainability threshold of 3%. The committee warned that public debt might hit the legal ceiling by 2027-2029, necessitating further borrowing. The proposed tax reforms focus mainly on consumption-based taxes, with a significant emphasis on increasing VAT to support welfare spending for the aging population.
The VAT increase was initially suggested in February but was dismissed by the ruling Bhumjaithai Party, which cited economic recovery concerns. The party has not yet commented on the renewed proposal. Additionally, the committee presented measures including taxes on stock trading and gold transactions and the removal of VAT exemptions for businesses earning less than 1.8 million baht annually.
Other measures target income-based taxation, proposing a 2% withholding tax on e-commerce platform sales and a 20% corporate tax on foreign digital firms. Discussions also included introducing a global minimum tax of at least 15% by 2027. Property tax reforms and a push to use AI for better tax collection were also on the agenda.
To address demographic challenges, the committee suggested extending retirement age from 60 to 65 by 2030 and raising child tax deductions. Additionally, a receipt lottery system could incentivize consumers to request electronic invoices, promoting tax compliance. The Home Town Tax policy aims to allow taxpayers to direct contributions to local community development projects.
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Adapted by ASEAN Now · The Thaiger · 20 Apr 2026