Thailand Unveils Bold Tax Reform as VAT Proposal Faces Backlash

[snoop1130]

Photo: The Thaiger

 

In an ambitious move to bolster Thailand's economy, Finance Minister Pichai Chunhavajira has presented a sweeping tax reform plan designed to increase state revenue and foster development. Unveiled at the Sustainability Forum 2025, the plan's core involves slashing the corporate income tax from 20% to 15%, in line with OECD benchmarks, and possibly reducing the personal income tax cap from 35% to attract global talent.

 

However, a proposed VAT increase from 7% to as high as 15% has sparked significant public concern. Critics, including economist Athiphat Muthitacharoen, argue this would disproportionately affect low-income families by elevating living costs. Recognising the backlash, Prime Minister Paetongtarn Shinawatra has distanced the government from the controversial VAT hike, signalling it may not proceed.

 

With fiscal pressures mounting—interest on government debt could exceed 14% of revenue due to borrowing—Athiphat calls for a fair, holistic tax reform. He points out that salaried workers bear most of the tax burden, despite a small portion of the population contributing.

 

 

Support for the corporate tax cut is strong among business leaders like Sanan Angubolkul, who see it as a way to revive employment and reduce costs. Nonetheless, doubts remain about its necessity given existing BoI incentives, with industry voices cautioning against rising production costs sparked by VAT changes.

 

As debate ensues, there's a clear emphasis on tailoring the tax system to ensure fairness and sustainability, reflecting the diverse economic landscape while remaining competitive globally.

 

-- 2024-12-16

 

 

[mfd101]

Part of the growing process, transitioning from 3rd World agriculture & 2nd World vehicle assembly to more sophisticated economic models.

 

Every country goes through it but it's not obvious that either the Thai ruling class or The People as a whole are prepared - or educated - for radical change.

[ukrules]

The OECD calls for minimum 15% tax rates to encourage countries NOT to offer tax breaks to companies whereby they pay little to nothing.

Here it's being twisted into an excuse to lower corporate taxes and screw the people over using VAT at the same time.

To simplify things - they're talking about giving corporations a massive tax discount at the expense of private citizens.

[Yumthai]

51 minutes ago, ukrules said:

To simplify things - they're talking about giving corporations a massive tax discount at the expense of private citizens.

Ideally, they should condition the 5% corporate tax cut to a minimum 2.5% increase on all staff (earning below a certain amount) wages.

[Tropicalevo]

1 hour ago, ukrules said:

The OECD calls for minimum 15% tax rates to encourage countries NOT to offer tax breaks to companies whereby they pay little to nothing.

Here it's being twisted into an excuse to lower corporate taxes and screw the people over using VAT at the same time.

To simplify things - they're talking about giving corporations a massive tax discount at the expense of private citizens.

 

at the expense of low paid, poorer and unemployed private citizens. ie the majority.

 

They also plan to reduce the % age of personal income tax.

Low paid workers do not pay any.

 

2 hours ago, snoop1130 said:

possibly reducing the personal income tax cap from 35% to attract global talent.