Thailand’s digital deficit weighs heavily on tech industry

The digital deficit in Thailand, estimated to be around 200 billion baht (US$5.56 billion) per year, is a major concern for tech industry leaders. The former president of the Thai e-Commerce Association, Pawoot Ponngvitayapanu, highlighted this issue to Parliament’s economic steering committee, urging them to address the deficit and informing the finance ministry.

The deficit stems from Thailand consuming more digital services from foreign providers than it produces domestically. Pawoot further suggested that foreign operators generating over 1.8 million baht (US$50,125) annually in Thailand should be identified, as they are liable to pay value-added tax (VAT) in the country. Since September 1, 2021, foreign electronic service providers with revenues surpassing the 1.8 million baht threshold are obliged to register for a 7% VAT liability.

In 2022, Thailand collected approximately 6.4 billion baht (US$178 million) from VAT on e-services. The majority of this tax, 63%, was paid by online advertising platforms, followed by online products (25%) and subscriptions for music, movies, and games (10%). In 2023, the VAT collection rose slightly to 6.7 billion baht (US$186 million), with the same sectors being the main contributors, albeit with slight percentage adjustments. VAT collection as of January was 2.3 billion baht (US$64 million), reported Bangkok Post.

by Alex Morgan

Photo courtesy of iStock

Full story: The Thaiger 2024-02-13

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