Thailand's VAT Proposal Stirs Economic Concerns

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Thailand's VAT Proposal  Stirs Economic Concerns

A proposed VAT hike from 7% to 15% in Thailand alarmed the restaurant and hotel sectors, though it has reportedly been shelved. Thai Restaurant Business Association leader Sorathep Rojpotjanaruch warned the tax would force closures or raise food prices by 20–25%. He proposed raising the VAT registration threshold and allowing tax deductions for raw materials to help SMEs. Comparisons to Europe’s higher VAT rates were criticized due to Thailand’s lower incomes. Thai Hotels Association President Thienprasit Chaiyapatranun also flagged the hike’s impact on fragile recovery and spending, suggesting a gradual increase to 10%. Clear communication and policies to boost spending are urgently needed.