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Thailand's Finance Ministry anticipates a revenue shortfall for the 2025 fiscal year, with collections likely to miss the 2.88 trillion baht target by tens of billions. Slower economic growth, projected at 2.2% GDP expansion, primarily drives the deficit. Key tax categories such as automobile taxes, hampered by the government's EV promotion, along with VAT from imports and corporate taxes, have underperformed.

 

In the first ten months of fiscal year 2025, revenue collections reached 2.25 trillion baht, 1.6% below target despite being 1.8% higher than the same period last year. The Revenue, Excise, and Customs Departments all fell short of their targets. However, state enterprises and other government agencies exceeded expectations, cushioning the overall deficit by remitting 157 billion baht and 151.2 billion baht, respectively.

 

A senior ministry source expressed confidence that despite the shortfall, the Finance Ministry can balance the budget by September 30, 2025. This will be done through fiscal tools and existing treasury liquidity of 405 billion baht without additional borrowing. The situation has rekindled discussions on tax reform as a long-term revenue solution.

 

Thailand's VAT rate is below the average for similar economies, with collection efficiency declining. Raising the VAT rate is being considered as a potential measure to generate additional revenue. Additionally, personal income tax collection is below peer average, with a significant portion of the population not filing returns.

 

Looking ahead, the government plans to analyze further tax reforms, particularly VAT adjustments, to increase state revenue. A 1% VAT increase could yield approximately 70 billion baht, potentially aiding infrastructure and vulnerable groups. The Finance Ministry continues to explore measures to address revenue collection challenges amidst ongoing economic sluggishness.

 

Key Takeaways

• Thailand's 2025 fiscal revenue is expected to fall short by tens of billions of baht.
• Slow economic growth and underperforming tax categories are major contributing factors.
• Tax reform discussions are ongoing, with potential VAT adjustments considered.

 

Related Stories:

Thailand Eyes Tax Overhaul: Push for Increased Revenue

Revenue Dept Plans Travel Tax Incentives for Low Season

 

  Adapted by ASEAN Now from The Nation 2025-09-19

 

 

Send some forms to the Shin family and check them properly... Maybe they can contribute a bit more... Besides that is the too expensive THB bad for the economy and tourist industry.. A lot of people know that, but the ones in charge are busy with filling their pockets first

The Thai government is softening up the retirees for a major soaking. Foreign retirees are a major drain on society with all of the free benefits they receive, and someone has to pay for it (yes, this is sarcasm). 

 

As George Carlin said "they're coming for your pension..." 

21 minutes ago, flaming dragon said:

The Thai government is softening up the retirees for a major soaking. Foreign retirees are a major drain on society with all of the free benefits they receive, and someone has to pay for it (yes, this is sarcasm). 

 

As George Carlin said "they're coming for your pension..." 

A 200 Baht a day tourist tax would be easy to collect, and bypass DTAs. While it would only cost 73000 a year for full time retirees.

15 hours ago, snoop1130 said:

Thailand's VAT rate is below the average for similar economies, with collection efficiency declining. Raising the VAT rate is being considered as a potential measure to generate additional revenue. Additionally, personal income tax collection is below peer average, with a significant portion of the population not filing returns.

 

The most part of the significant portion of the population not filing returns does not even reach, after deductions/allowances, the first tax bracket. No money to milk here.

 

The much less important part - the ones that can be milked - is composed of the middle-earner crowd who either gets tax withheld from their salary as de facto final tax (because they mostly don't file anything more or in order to get a tax refund) or do not declare/declare partially, and the wealthy who are structured to pay a tiny relative contribution, if any, compared to their real income.

 

The only way this legacy situation can change is to start efficiently enforcing tax laws meaning deeply auditing a large part of the population. Regardless of the time and means needed, this could cut the corrupted schemes at all levels which will lead to a substantial drop of income for every middlemen. Can't see that happening without badly hurting an already weakening economy.

 

IMO, the quick and sure way to collect more tax is indeed raising VAT to be on par with the regional competitors.

12 hours ago, Peter Crow said:

A 200 Baht a day tourist tax would be easy to collect, and bypass DTAs. While it would only cost 73000 a year for full time retirees.

 

It wouldn't start at 200 baht per day,but, like cheap underwear, the fee could crawl up to that.   Why bear such an insult? 

43 minutes ago, flaming dragon said:

 

It wouldn't start at 200 baht per day,but, like cheap underwear, the fee could crawl up to that.   Why bear such an insult? 

 

But you see my point, a tourist tax would make all DTA's, LTR's, etc irrelevant. At the level I suggest it would generate significant revenue, collected with minimal cost, a few collection offices located in airports would all that's needed. KISS (Keep It Simple and Stupid) all the way.

 

21 minutes ago, Peter Crow said:

 

But you see my point, a tourist tax would make all DTA's, LTR's, etc irrelevant. At the level I suggest it would generate significant revenue, collected with minimal cost, a few collection offices located in airports would all that's needed. KISS (Keep It Simple and Stupid) all the way.

 

 

I've got to admit that it's a brilliant end run around the complexities of implementing taxes with the dozens of DTAs in effect.  I'd leave Thailand but many are invested and/or wouldn't object to such a tax.