Thailand Considers VAT on Imported Goods Under 1,500 Baht

[webfact]

Picture courtesy: Scott-Wilkinson

 

The Thai Finance Ministry has put forward a significant proposal to amend the current Value Added Tax (VAT) law for imported goods valued below 1,500 baht. If implemented, this change could impact both consumers and businesses in Thailand, aiming to level the playing field and enhance fairness in taxation.

 

Deputy Finance Minister Chulaphan Amornvivat announced the proposal this morning, stating that it has received support from the Finance Minister, Pichai Chunhavajira.

 

The proposed amendment is now set to be reviewed by the cabinet next week. The primary goal of this bill is to ensure a more equitable tax collection system that benefits both the public and private sectors, including international manufacturers and small to medium-sized enterprises (SMEs) within Thailand.

 

The current system exempts imported goods valued under 1,500 baht from VAT. The proposed change would see the Customs Department taking responsibility for VAT collection on such low-value imports.

 

Currently, they already manage VAT collection on goods exceeding this value. The revenue gathered would be transferred to the Revenue Department, maintaining the consistency of tax revenue channels.

 

 

 

Moreover, the Finance Ministry plans to review the existing Revenue Code. They will also enter discussions with online platform operators, like e-commerce giants, to facilitate the direct collection and remittance of VAT to the Revenue Department.

 

This move aligns with global trends where countries are increasingly looking to tax digital transactions to capture a fair share of revenue from growing online commerce.

 

The proposal aims to address the competitive disparity that domestic producers face against cheaper, tax-free imports. It also seeks to streamline the tax process, ensuring that all imports, irrespective of their value, contribute their fair share to the Thai economy. Although the bill is still in its early stages, its progression could mark a significant shift in Thailand’s VAT regime.

 

Next week’s cabinet review will be crucial in determining whether this proposal moves forward, potentially reshaping the landscape for both businesses and consumers.

 

-- 2024-05-31

 

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[webfact]

Thailand to amend VAT laws for imported goods under 1,500 baht

by Top

 

Julapun Amornvivat, Thailand's deputy finance minister, speaks during the Asian Financial Forum in Hong Kong, China, on Wednesday, Jan. 24, 2024. Photographer: Lam Yik/Bloomberg
Picture of Chulaphan Amornvivat courtesy of  Bangkok Post

 

A proposal to amend laws regarding the collection of Value Added Tax (VAT) on imported goods valued at less than 1,500 baht was announced today by Chulaphan Amornvivat, Deputy Minister of Finance. The proposed amendment, approved by Finance Minister Pichai Chunhavajira, aims to establish a fairer system for public and private sector importers, international manufacturers, and small and medium-sized enterprises (SMEs) in Thailand.

 

The Ministry of Finance plans to present this proposal to the Cabinet for consideration next week. Under the new system, the Customs Department will take on the responsibility of collecting VAT on imported goods valued below 1,500 baht. This process will mirror the current method used for goods that exceed 1,500 baht in value, where the collected VAT is transferred to the Revenue Department.

 

Deputy Minister Chulaphan highlighted the importance of creating a level playing field through this proposed amendment.

“This bill ensures that all stakeholders, including international manufacturers and SMEs, are subject to the same VAT collection standards, promoting fairness in the market.”

The Ministry of Finance also plans to explore amendments to the Revenue Code. Part of this exploration involves engaging with online platform operators to streamline the direct collection and remittance of VAT to the Revenue Department. This move is seen as an effort to modernise the tax collection process in line with the growing trend of e-commerce.

 

The proposed changes come as a response to the increasing volume of low-value goods imported through online platforms. These goods often escape VAT collection, creating an uneven competitive environment for domestic businesses. The new system seeks to address this issue by ensuring that all imported goods, regardless of their value, contribute fairly to the national revenue.

 

Operational procedures

 

The Customs Department’s involvement in VAT collection for lower-value goods will require adjustments in their operational procedures. However, officials believe that these changes will be beneficial in the long run, a Customs Department representative stated.

 

“Adapting our processes to accommodate this new responsibility will be challenging, but it is a necessary step to ensure fairness and efficiency in our tax system.”

 

In discussions with online platform operators, the Ministry of Finance intends to develop a seamless process for VAT collection. These discussions are expected to cover the technical and logistical aspects of implementing the new system. The goal is to minimise disruption for both consumers and businesses while maximising compliance and revenue collection.

 

The proposed VAT collection amendment is part of a broader effort by the Thai government to enhance the country’s tax system. By addressing gaps in VAT collection from imported goods, the government aims to boost national revenue and support economic growth. This initiative aligns with global trends where many countries are reevaluating their tax policies in response to the digital economy’s expansion.

 

If approved by the Cabinet, the new VAT collection rules could come into effect later this year. The Ministry of Finance is preparing for a smooth transition, with plans to provide clear guidelines and support to all affected parties. The success of this initiative will depend on effective communication and cooperation between the government, businesses, and consumers.

 

The Finance Ministry’s proactive approach to revising tax laws demonstrates its commitment to creating a more equitable and efficient tax system in Thailand. By ensuring that all imported goods are subject to VAT, the government hopes to foster a fair competitive environment and secure additional revenue for public services and infrastructure development, reported Pattaya News.

 

Full story: The Thaiger 2024-05-31

 

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[Korat Kiwi]

Yes the government is after every little satang that it can get it's hands on.  Guarantee this won't be the last of money making schemes. 

 

What's next?  Hit tourists and foreigners with some other ridiculous form of tax? 

[lordgrinz]

How about we tier the VAT, 0% on anything under B1500 (to help the poor), keep it at 7% on everything up to say B1.5 million (help the middle-class), then 25% on everything over B1.5 million, that should hit the superrich where it hurts.

[connda]

3 hours ago, webfact said:

If implemented, this change could impact both consumers and businesses in Thailand, aiming to level the playing field and enhance fairness in taxation.

Bravo Sierra 🐂 💩

 

It's meant to harvest the most amount of tax revenue from the most economically downtrodden segment of society for the benefit of large Thai corporate entities and the gaping maw of a government facing a inflationary debt spiral.  "Screw the peasants and commoners.  We're going Feudal and Medieval on them!" 

Tax and inflation:  Happiness To The People.  They'll be asking for Prayut to come back soon.

[Xonax]

Good luck with that. It will be an administrative and logistics nightmare.

 

[Celsius]

I thought this was a done deal.

 

And people here are worried about being resident for income tax.

 

LOL

[Will B Good]

If you buy an item in the UK and it is repackaged and posted to you as a gift, no receipt,.......what then?....who decides its value and what tax is due?

[John Drake]

Prayuth was better

[lapamita]

1 hour ago, lordgrinz said:

How about we tier the VAT, 0% on anything under B1500 (to help the poor), keep it at 7% on everything up to say B1.5 million (help the middle-class), then 25% on everything over B1.5 million, that should hit the superrich where it hurts.

seems no knowledge of econommy..............

it not hurt the superrich, it hurts everybody , mostly industrial and manufactures, and would lead to massive price increase in all sectors and prices. and at the end hurt  at most the low/middle class

 

to collect VAt on  under 1500 ,  is the result of the massive growth of imports  (from china) since e commerce bomming

[SpaceKadet]

2 hours ago, lordgrinz said:

How about we tier the VAT, 0% on anything under B1500 (to help the poor), keep it at 7% on everything up to say B1.5 million (help the middle-class), then 25% on everything over B1.5 million, that should hit the superrich where it hurts.

Except the fact that it's the superrich that make the rules in this country.

[lordgrinz]

12 minutes ago, SpaceKadet said:

Except the fact that it's the superrich that make the rules in this country.

 

They do in all countries, the difference here is that superrich have no checks and balances on their behavior......thus, one of the most lopsided economies in the world.

[tgw]

VAT on imports isn't really a big issue, 7% on reading glasses that cost 35 baht won't be much.

 

the problem will be with the "service fee" - I guess they will collect that on every import to pay for the manpower needed to process the volume.

 

[LudwigK]

what do you think? 

The Government loves you... or ...your money?

[Airwolf]

Does every country include VAT on the shipping cost, or is it just Thailand?

I paid 120% duty/fees on a shipment from France, as they dinged me for the shipping too. 

[Foxx]

How is this article different from the ones on this site on April 3:
 

and April 29?
 

 

 

[wensiensheng]

1 hour ago, Will B Good said:

If you buy an item in the UK and it is repackaged and posted to you as a gift, no receipt,.......what then?....who decides its value and what tax is due?

I believe that if they happen to open the package, they then look up the value of the contents online. 
 

that’s what happened to my nephew when he had a drone sent over from the UK. He had to go to customs to collect it because they intercepted it and was arguing it had a low value. The customs officer just opened his computer browser and looked up the retail value.

[khunjeff]

6 hours ago, webfact said:

Deputy Finance Minister Chulaphan Amornvivat announced the proposal this morning

 

This is at least the 10th time this proposal has been "announced", and usually it's presented as though it's a done deal (like all "proposals" from this government).

[Bangkok Barry]

11 minutes ago, Foxx said:

How is this article different from the ones on this site on April 3:
 

and April 29?
 

 

 

 

There is no difference. Just repeating exactly the same. When they originally posted the story I said we now had to be prepared for weeks of delay waiting for anything from overseas as we can be sure they won't employ more customs officials for the added checks and paperwork, and planning to get private businesses to use their resources to be unpaid tax collectors is a non-starter. The Post Office does that now, but they are part of the government. Another idea dreamed up by someone with the mind of a child, unable to think things through.

[findlay13]

The one for you two for me system?

[Nickcage49]

Man this government is getting greedy. Pretty soon they'll tax your arse.

[Purdey]

So, maybe someone can comment -  will this slow down spending by local consumers by raising prices, leading to more inflation?

 

It isn't like VAT will go back to help people but more likely buy more aircraft carriers and submarines. 

[cnx101]

3 hours ago, connda said:

Bravo Sierra 🐂 💩

 

It's meant to harvest the most amount of tax revenue from the most economically downtrodden segment of society for the benefit of large Thai corporate entities and the gaping maw of a government facing a inflationary debt spiral.  "Screw the peasants and commoners.  We're going Feudal and Medieval on them!" 

Tax and inflation:  Happiness To The People.  They'll be asking for Prayut to come back soon.

And the toad

[hotchilli]

7 hours ago, webfact said:

The current system exempts imported goods valued under 1,500 baht from VAT. The proposed change would see the Customs Department taking responsibility for VAT collection on such low-value imports.

The government coffers must be really empty.

[hotchilli]

16 minutes ago, Nickcage49 said:

Man this government is getting greedy. Pretty soon they'll tax your arse.

If it gets that low I'm off.

[NoDisplayName]

18 minutes ago, Nickcage49 said:

Man this government is getting greedy. Pretty soon they'll tax your arse.

 

But the authorities have investigated, and found no prostitution.

[patman30]

it will happen here
just as it is happening elsewhere
sending VAT free "gifts" internationally via the postal system will become a thing of the past
though this may be more to do with shopee and lazada and low value items from China
 

[Moti24]

I used to import a few things from China.  No charges for items under 1500B including shipping.  Three or 4 times, I had to pick-up the package from EMS, and pay the VAT, even though the total price including shipping was only 1200-1300B.  When I queried it, I was told that they could send it back to Bangkok, but it probably wouldn't come back.

 

Yes, it was Pattaya!  Where else!

[Robert Tyrrell]

Hello,

 

This Pm and his Adminastartion is detroying Thailand,It's bad enough sometimes the tax is nearly doubled or more to import products RIDICULOUS !!!! THAILAND !!!! Now your talking about taxing all !!! ??? While inflation global economy is untamed your going to punish people more by doing stuff like this ???? No mention of the next business wait until the PM Destroys the other buisness booming in Thailand. I have been talking to many expats who are pulling the plug on Thailand and with that and the angry public it spells disaster for Thailands recovery.

[chiman]

As usual, two speeds... lethargic and hysterical