"""And the silly notion of taxing the wealth"""

 

Ill never understand this concept. WHO provides the jobs, not the person making 120,000bt a YEAR.

13 hours ago, Base32 said:

A ฿100 THB item will cost ฿110 THB with a 10% VAT.  

No, as within the 100 THB is already 7% VAT.

14 hours ago, Base32 said:

A ฿100 THB item will cost ฿110 THB with a 10% VAT.  I think we will find out whether or not the increase from 7% to 10% will be the "Third-Rail" of Thai politics or not.  

Here's the arithmetic.

Net price: 93.5 baht
Current VAT rate: 7%

93.46 x 1.07 = 100.0022

93.46 x 1.10 = 102.806
 

Not a good time to be announcing this with a new election imminent. Likely to lose them votes.

The Thai Bankers' Association estimates the informal economy to be 48.4% of GDP.

It is estimated that around 60% of the labour force is engaged in informal work.  Over 55% of informal workers are in agriculture, so about a third of all workers are in informal agriculture jobs (55% of 60% = 33%); many operate with cash-based earnings and limited access to formal financial systems.  Formalising this informal economy isn't going to happen in the foreseeable future.

So, only around half the workforce are paying tax.  The money to run the country needs to be raised from somewhere, so a consumption tax appears to be the best way to do it.  Fortunately VAT doesn't apply to basic food, only processed or prepared food.

 

Thai baht: 20-30% stronger than it should be.

Inflation for tourist activities: 20-30% from what it used to be.

Now this added tax another 5% on the top.

 

Then they wonder why less tourists are coming. Aside from that - VAT is a tax primarily affecting the poor. People who are struggling to get by as-is will get hit the hardest. Surely there are better ways to raise revenue (for example devalue the baht so more tourists come).

That should float like a lead balloon.

3 hours ago, davb said:

Then just let the free market take off.

What a truly dreadful future that would be! 

1 hour ago, edwardflory said:

WHO provides the jobs, not the person making 120,000bt a YEAR.

Nor those with more spendable cash!  Thus there are no jobs (at a formal level)! 

49 minutes ago, PingRoundTheWorld said:

for example devalue the baht so more tourists come.

Yes, it would help tourism and Thai export companies would be happy with a devaluation but the importers (including you and I) would be adversely affected.
 

A weaker baht is beneficial only if everything else stays equal — but in reality, there are drawbacks:

Potential Problems for Exporters

1. Higher cost of imported raw materials

   • Many Thai export industries depend on imported components (e.g., electronics, auto parts, animal feed ingredients, packaging materials).

   • These become more expensive when the baht is weak.

2. Higher fuel and energy costs

   • Thailand imports most of its fuel.

   • A weaker baht raises oil and gas prices → higher transport and production costs.

3. Debt servicing costs

   • Exporters with loans in USD, EUR, or JPY will face higher repayment amounts when the baht devalues.

4. Profit margin uncertainty

   • Rapid currency swings make planning difficult.

   • Companies may need to hedge (buy financial protection), which adds cost.

5. Domestic inflation

   • Rising prices for materials and energy increase overall operating expenses.

So:

Exporters benefit from increased price competitiveness, but many will also face higher operational costs, which can reduce or cancel out the advantage.
 

Effects of baht devaluation on the general Thai population

A weaker baht affects everyday life in several important ways:

A. Higher Cost of Living (Inflation)

Thailand imports large amounts of:

• fuel

• fertilizers

• machinery

• vehicles

• animal feed (soy, corn)

• cooking oil inputs

• medicines and medical equipment

• construction materials

When the baht drops:

• fuel prices rise → transport costs rise → most goods become more expensive

• food prices rise (especially pork, chicken, eggs, and vegetables)

• electricity costs may increase

• consumer goods (phones, appliances, electronics) rise in price

This hits low- and middle-income families hardest.

B. Higher Farmer Costs

Even though exports might benefit (e.g., rice, rubber, fruit), the cost of:

• fertilizer

• chemicals

• machinery

• pump fuel

all increases.
So farm profits don’t always improve.

13 hours ago, Patong2021 said:

I am a supporter of VAT. It is a consumption tax,  a Value Added Tax.   It is the most effective way of dealing with societies where tax avoidance is a way of life. The wealthy who would otherwise avoid tax  must pay. Black market  money washing is made less profitable. It is more cost effective to collect VAT as a point of sale transaction than to try and collect income and manufacturing taxes.

 

 

It is regressive only if blanket. Thailand has VAT exemptions which mitigate the impact on the poor. Food, public transport,  government services, basic housing  and health care is VAT exempt. Small merchants/market stalls do not charge VAT.

As per Section 81 of the Revenue Code Value added tax shall be exempt on the following businesses:

-sale of goods but not for export purpose or provision of services as follows:

-sale of agricultural products whether they are trunks, branch, leaf, bark, offshoot, root, bud, bulb, pod, seed or other parts of plants and their by- products in fresh or preserved condition in order to temporarily prevent from spoiling during transportation by chilling, frozen means or by other means or preservation to prevent from spoiling for retail sale or whole sale by chilling, frozen, drying , grinding, segmentation method or by other method, white rice or by-product from rice milling but not including wood, firewood or products from wood sawing or food products in can container or package processed on manufacturing basis in accordance with terms and conditions prescribed by the Director-General.

-sale of alive or dead animals, and in the case of non- alive animal whether it be flesh, parts of animal, egg, milk or by-product from animal in fresh or preserved condition to temporarily prevent from spoiling during transportation by chilling, frozen means or by other mean or preservation to prevent from spoiling for retail sale or wholesale by chilling, frozen, dried, grind, segmentation means, or by other means, but not including food product in can container or package done on manufacturing basis in accordance with terms and condition prescribed by the Director-General;

-sale of fertilizers;

-sale of fish meal , animal feed;

-sale of pharmaceutical or chemical products used on plants or animal for nourishing, preventing, destroying, or eliminating pesticide or disease of plants and animals,

-sale of newspaper, magazine or school books,

provision of educational services of public educational institutions, educational institutions under the law governing private universities or private schools under the law governing private school,

provision of services relating to art and cultural work in field and category of business as prescribed by the Director-General with the Minister’s approval,

provision of services in medical treatment, accounting, lawyer or other liberal professional services as prescribed by Revenue Department with Minister’s approval and governed by the laws governing such liberal professional services;

-provision of medical service of health institution under the law governing such health institution;

-provision of research or academic services as prescribed by the Director- General with the Minister’s approval;

-provision of services of library, museum, zoo;

-provision of services under employment contract;

-provision of services on organizing amateur sports;

-provision of services by public entertainer as prescribed by the Director- General with the Minister’s approval;

-provision of domestic transport;

-provision of international transport excluding transport by aircraft or ship;

-rental of immovable property;

-provision of service of local authority excluding commercial services of local authority or service generating income or benefit whether it is infrastructure business or not;

-sale of goods or provision of services of a ministry, department which remit all revenue to the state without deducting expenses;

-sale of goods or provision of services for the benefit of religions or public charity in Thailand and profits arising therefrom are not used for other purposes

 

- Small businesses with an annual turnover of less than 1.8 million baht are exempt from VAT registration. 

This means that the small market stalls where many low income Thais to their  shopping won't be charging VAT.

 

 

Do you know if there is currently VAT on bread?

13 hours ago, Patong2021 said:

I am a supporter of VAT. It is a consumption tax,  a Value Added Tax.   It is the most effective way of dealing with societies where tax avoidance is a way of life. The wealthy who would otherwise avoid tax  must pay. Black market  money washing is made less profitable. It is more cost effective to collect VAT as a point of sale transaction than to try and collect income and manufacturing taxes.

 

 

It is regressive only if blanket. Thailand has VAT exemptions which mitigate the impact on the poor. Food, public transport,  government services, basic housing  and health care is VAT exempt. Small merchants/market stalls do not charge VAT.

As per Section 81 of the Revenue Code Value added tax shall be exempt on the following businesses:

-sale of goods but not for export purpose or provision of services as follows:

-sale of agricultural products whether they are trunks, branch, leaf, bark, offshoot, root, bud, bulb, pod, seed or other parts of plants and their by- products in fresh or preserved condition in order to temporarily prevent from spoiling during transportation by chilling, frozen means or by other means or preservation to prevent from spoiling for retail sale or whole sale by chilling, frozen, drying , grinding, segmentation method or by other method, white rice or by-product from rice milling but not including wood, firewood or products from wood sawing or food products in can container or package processed on manufacturing basis in accordance with terms and conditions prescribed by the Director-General.

-sale of alive or dead animals, and in the case of non- alive animal whether it be flesh, parts of animal, egg, milk or by-product from animal in fresh or preserved condition to temporarily prevent from spoiling during transportation by chilling, frozen means or by other mean or preservation to prevent from spoiling for retail sale or wholesale by chilling, frozen, dried, grind, segmentation means, or by other means, but not including food product in can container or package done on manufacturing basis in accordance with terms and condition prescribed by the Director-General;

-sale of fertilizers;

-sale of fish meal , animal feed;

-sale of pharmaceutical or chemical products used on plants or animal for nourishing, preventing, destroying, or eliminating pesticide or disease of plants and animals,

-sale of newspaper, magazine or school books,

provision of educational services of public educational institutions, educational institutions under the law governing private universities or private schools under the law governing private school,

provision of services relating to art and cultural work in field and category of business as prescribed by the Director-General with the Minister’s approval,

provision of services in medical treatment, accounting, lawyer or other liberal professional services as prescribed by Revenue Department with Minister’s approval and governed by the laws governing such liberal professional services;

-provision of medical service of health institution under the law governing such health institution;

-provision of research or academic services as prescribed by the Director- General with the Minister’s approval;

-provision of services of library, museum, zoo;

-provision of services under employment contract;

-provision of services on organizing amateur sports;

-provision of services by public entertainer as prescribed by the Director- General with the Minister’s approval;

-provision of domestic transport;

-provision of international transport excluding transport by aircraft or ship;

-rental of immovable property;

-provision of service of local authority excluding commercial services of local authority or service generating income or benefit whether it is infrastructure business or not;

-sale of goods or provision of services of a ministry, department which remit all revenue to the state without deducting expenses;

-sale of goods or provision of services for the benefit of religions or public charity in Thailand and profits arising therefrom are not used for other purposes

 

- Small businesses with an annual turnover of less than 1.8 million baht are exempt from VAT registration. 

This means that the small market stalls where many low income Thais to their  shopping won't be charging VAT.

 

 

There is one consumer item that as far as I am aware attracts VAT without exception for anyone is the electrical bill and retail bottled gas.

In addition the exemption of import tax on less than 1500 Bht  e-commerce goods plus ends on Dec 31st 2025.

I have been unable to discover if that implies import duty PLUS VAT at 10 % ? Apparently imported items already attract VAT  but any e-commerce invoice I have ever received from Lazada has only been for shipping costs and does not itemize any amount for VAT.

How much impact on e-commerce sites there will be could be interesting.

27 minutes ago, Greenhill said:

Do you know if there is currently VAT on bread?

VAT applies as it is considered a processed food.

20 hours ago, Sir Dude said:

They are clearly broke... but tax is a politically dangerous game here in Thailand, as most normal Thais just can't afford things as they are now, and few pay tax at all... I probably pay more tax than most normal Thais do.

What the government needs to do is tax the wealthy instead.... not normal Thais and SMEs as many large corporations and wealthy families dodge so much tax. it's crazy.

On top of that, then crack down in a meaningful way on the rampant corruption that is on show everywhere... Duh! Don't go for low hanging fruit like tourism and VAT, go for the real bad guys... or you will be forever bailing out the poor and it will just stoke up tension. I'm not saying go lefty about this, just be fair... which it isn't at the moment.

You talking Thailand or USA?

20 hours ago, daveAustin said:

Tax tax tax! I thought Taxin was in prison already. 

Maybe they should drop income tax and have a higher VAT, at least everyone would pay something ?

Wasn't so much wasted with corruption there would probably make the budget every year.

Something costing 100THB now WITH 7% VAT included, will cost 101.4 THB after the VAT tax rate increases to 8.5% and 102.8 THB at 10%.

 

To expand on my previous comment, if 70,000,000 people spend 100 THB per day on VAT included transactions that is 98,000,000 THB per day and 35,770,000,000 THB per year in increased Govt. revenue.

23 hours ago, blaze master said:

Does this mean more money to waste on useless military gear ?

Relax it has to be approved by the legislature and there will be an erection before that

Just now, kingstonkid said:

Relax it has to be approved by the legislature and there will be an erection before that

 

I get an erection just thinking about higher taxes.

2 hours ago, Cliffo said:

Something costing 100THB now WITH 7% VAT included, will cost 101.4 THB after the VAT tax rate increases to 8.5% and 102.8 THB at 10%.

 

 

7% of 100 = 7 baht     10% of 100 = 10 baht..... 107 or 110 baht

10 hours ago, Greenhill said:

Do you know if there is currently VAT on bread?

I am not a tax accountant, but based upon my experience  at retailers, it depends on how the bread is provided. If a Value was added,at a large service provider, then yes VAT applies. For example, the purchase of a hamburger from an international chain. If the  prepared item is purchased from a small stall at a market, then most likely no. Also, if purchased as a prepared baked item from a bakery doing less than 1.8 million baht in revenue, no. If purchased from a large revenue grocery store, yes.  

On 11/21/2025 at 7:09 PM, 0ffshore360 said:

I am sure that those that live in the Western economies would applaud paying 7-10 % in total taxes as the majority in Thailand do by way of VAT.

 

I am from Oregon: we never had a sales tax, which is what a VAT is in essence, ya think? Most non progressive form of taxation with the burden hitting the poor the hardest. Which explains why they want to raise that tax. 

On 11/21/2025 at 5:35 PM, snoop1130 said:

Picture courtesy of Thairath

 

Thailand's government plans to increase VAT gradually to 10% by 2028 to address budget deficits. Finance Minister Ekniti Nitithanprapas announced the reform during the Money Expo 2025 in Bangkok, emphasizing the need for fiscal stability. The initial VAT hike will be a 1.5% rise to 8.5%.

 

The VAT increase is part of the Finance Ministry’s medium-term fiscal framework (MTFF), approved by the Cabinet on November 18. The MTFF aims to enhance investor confidence by demonstrating commitment to financial discipline. Thailand’s fiscal deficit last fiscal year was 4.4%, exceeding international norms and leading to downgrades by Moody’s and Fitch Ratings.

 

Ekniti assured that if VAT increases face challenges, other measures will be used to maintain fiscal health. The government aims to reduce the deficit to under 3% of GDP by 2029 through a series of tax reforms and expenditure cuts. Plans include leveraging the Thailand Infrastructure Fund and expanding public-private partnerships.

 

The government is targeting cost reductions by eliminating redundant spending and consolidating welfare schemes. Additionally, a stimulus package for SMEs is in preparation, offering loans, loan guarantees, and tax perks to encourage government contract bids. Large corporations may receive tax incentives for supporting smaller businesses under the "big brothers help little brothers" initiative.

 

Looking forward, the government will introduce the Thailand Individual Savings Account for more efficient long-term savings. This will replace various existing funds, streamlining the retirement savings framework, reported The Thaiger.

 

Key Takeaways

• Thailand will raise VAT gradually to 10% by 2028 to combat fiscal deficits.
• The government’s MTFF outlines plans to reduce the deficit and boost investor confidence.
• Additional reforms include SME support and revamped retirement savings schemes.

 

Related Stories

Caretaker Cabinet Extends 7% VAT Rate for Another Year

Major VAT Fraud Network Busted: Over 1 Billion Baht in Losses

 

  Adapted by ASEAN Now from The Thaiger 2025-11-21

 

 

 

After the recent price increases, raising VAT would be a stab in the back for everyone. VAT is an unfair tax that affects everyone regardless of their financial status. This will greatly affect the poorest people. However, they are looking at what it brings in, looking at how much it needs to increase to cover the deficit of their incompetent government. Raising taxes seems easier than finding competent politicians... 

4 hours ago, Marsupienemi said:

VAT is an unfair tax that affects everyone regardless of their financial status.

Au contraire, VAT is very fair as this is one sure tax the wealthy cannot escape. Rich people obviously spend more buying more expensive products/services triggering in essence a lot of VAT money. For the lower class, just need to implement VAT brackets in order to exempt or mitigate VAT on essential things.

On 11/21/2025 at 11:33 AM, blaze master said:

Does this mean more money to waste on useless military gear ?

 

Probably.

On 11/21/2025 at 1:42 PM, Yumthai said:

Who do you think run this country?

 

Tax dodgers?

On 11/22/2025 at 9:18 AM, IsaanT said:

Yes, it would help tourism and Thai export companies would be happy with a devaluation but the importers (including you and I) would be adversely affected.

Thanks ChatGPT 😜

Exports and tourism account for more than 70% of Thailand's GDP. Devaluing the baht would help the economy, period.

5 hours ago, PingRoundTheWorld said:

Thanks ChatGPT 😜

Exports and tourism account for more than 70% of Thailand's GDP. Devaluing the baht would help the economy, period.

33% of the Thai population - the agricultural sector - wouldn't thank you for this.  The farmers are already poor.

On 11/22/2025 at 3:07 PM, bubblegum said:

You talking Thailand or USA?

Did he mention the USA at all???