Pridiyathorn says no need to raise VAT

Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula insisted Monday that Thai government does not need to raise Value Added Tax as mentioned by some media at present.

He said the government's revenue during the beginning of 2007 fiscal year still meet the target and there is no need to revise the government's tax policy currently.

Pridiyathorn said the current economy is still growing well and would be boosted from the five rail routes of mass transit projects approved by the Cabinet recently. Thus, there is no need to adjust tax policy at the moment.

The current VAT rate is 7 per cent.

In addition, the interim government's term is limited. Thus, the government should not involve with tax revision.

Pridiyathorn said comment of Sommai Phasee, deputy finance minister, about the VAT hike was longterm tax policy and would not be implemented at present.

Source: The Nation - 12 February 2007

Thailand May Hike Value-Added Tax, But Not This Year

Thailand's Ministry of Finance is looking at plans to raise government revenue, especially the possibility of a value-added tax rate hike, Deputy Finance Minister Sommai Phasee said Monday.

"We're studying ways to increase the government's revenue to match with expenditure. However, we will not increase the value-added tax this year," Sommai told reporters.

The Thai-language newspaper Krungthep Turakij reported Monday that the ministry is considering gradually increasing the VAT rate up to as high as 10% from its current rate of 7%.

The ministry is also mulling raises to the excise taxes on cigarettes, alcohol and oil, the report said.

Sommai said the ministry wants to increase government revenue to 18% of gross domestic product from a projected 16.8% of GDP for the current fiscal year begun Oct. 1, 2006.

The VAT is among the government's top revenue sources and will be main focus in seeking to increase budgetary inflows, Sommai said.

The government has set a total revenue target of THB1.42 trillion for the current fiscal year, with a projected budget deficit of THB146 billion.

Source: Dow Jones Newswire - 12 February 2007

In addition, the interim government's term is limited. Thus, the government should not involve with tax revision.

Pridiyathorn said comment of Sommai Phasee, deputy finance minister, about the VAT hike was longterm tax policy and would not be implemented at present.

Hum... Is the Foreign Business Act a "longterm" policy ?

And what about the "sufficiency economy" ? Short, mid or long term ?

So now you can decipher the minister's statement : "VAT is way too complicated. I will leave this issue to the next government"....