Thailand's Senate committee has proposed a tax reform plan to tackle the country's fiscal deficit, suggesting an increase in value-added tax (VAT) from 7% to 10%. Chaired by Kamphol Supapaeng, the Economic, Financial and Fiscal Affairs Committee met on April 19 to discuss these measures aimed at easing long-term fiscal pressures. If approved, the proposals will be submitted to the Cabinet for potential implementation.

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Thailand has faced budget deficits averaging 4% of GDP over the past decade, surpassing the fiscal sustainability threshold of 3%. The committee warned that public debt might hit the legal ceiling by 2027-2029, necessitating further borrowing. The proposed tax reforms focus mainly on consumption-based taxes, with a significant emphasis on increasing VAT to support welfare spending for the aging population.

The VAT increase was initially suggested in February but was dismissed by the ruling Bhumjaithai Party, which cited economic recovery concerns. The party has not yet commented on the renewed proposal. Additionally, the committee presented measures including taxes on stock trading and gold transactions and the removal of VAT exemptions for businesses earning less than 1.8 million baht annually.

Other measures target income-based taxation, proposing a 2% withholding tax on e-commerce platform sales and a 20% corporate tax on foreign digital firms. Discussions also included introducing a global minimum tax of at least 15% by 2027. Property tax reforms and a push to use AI for better tax collection were also on the agenda.

To address demographic challenges, the committee suggested extending retirement age from 60 to 65 by 2030 and raising child tax deductions. Additionally, a receipt lottery system could incentivize consumers to request electronic invoices, promoting tax compliance. The Home Town Tax policy aims to allow taxpayers to direct contributions to local community development projects.

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  Adapted by ASEAN Now · The Thaiger · 20 Apr 2026

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The economic grow is not stopped enough.. even with the rising prices the Government choose to raise the VAT ..... Things will get more expensive an the THB will strengthen again..... Nothing can stop the greed...

Wealthy people consume more than poor people and will pay more tax. It's an imperfect system but it's the one they've got. Most governments provide some sort of rebate to the poorest citizens.

Any VAT increase is going to affect the people with the least room to absorb it. VAT is a regressive tax, everyone pays the same rate, but the impact is heavier on those with lower‑income because a larger share of their income goes to basic consumption.

Thailand’s tax system is already heavily based on indirect taxes, while direct taxation, especially on high earners, large landholders, and certain business sectors remains low.

Why not broaden the income‑tax base and close loopholes that allow high‑income individuals and large corporations to minimise tax?

This article suggests the increase is necessary for fiscal stability, but the reality is that it will simply shift more burden onto those already struggling with rising living costs!

Living and being retired on the cheap here seems to be coming to an end. Subsidized diesel no more, VAT and general costs all on the up. Phuket wants 1000 baht for a residence letter which makes one suspect Extension and Visa costs may go up too. New Government, new system.

The proposed move will not only increase the cost of goods, and thus increase inflation, but will also push more people into poverty, thus increasing health problems and stress on the public health care system.

The only viable solution, as noted by a previous poster, is to increase big business taxes and taxes on the wealthy - which will of course be opposed by those with "influence".

In recent years, more Thais have been slipping into poverty, more are struggling to make ends meet, while the wealth of the wealthy and big business profits increased. All of which have historically lead to increased social unrest.

4 hours ago, Jim Waldron said:

Thailand’s tax system is already heavily based on indirect taxes, while direct taxation, especially on high earners, large landholders, and certain business sectors remains low.

Why not broaden the income‑tax base and close loopholes that allow high‑income individuals and large corporations to minimise tax?

High tax on wealthy individuals is inefficient, anywhere in the world.

High tax on businesses does not work either, they will relocate to other countries.

Ultimately who makes the rules? Not the poor/middle class.

The sure albeit imperfect way to make society fairer and compensate wealth gap is to tax spending with 0/low tax rates on essential goods and services. Tax-friendly environment incentives money to be spent.

Clowns. Instead of fixing the overvalued baht which needs to devalue at least 20% - which will massively increase exports and tourism - they want to make life even more expensive for poor and ordinary Thais, more expensive for tourists and expats (even though Thailand is massively overpriced already compared to all of SEA), and more expensive for foreign companies. The rich will finds ways around it, the poor will pay the price.

Here's a silly idea, instead of raising taxes, how about cutting spending.

Told you it was silly, 555

9 hours ago, jacko45k said:

Living and being retired on the cheap here seems to be coming to an end. Subsidized diesel no more, VAT and general costs all on the up. Phuket wants 1000 baht for a residence letter which makes one suspect Extension and Visa costs may go up too. New Government, new system.

Nothing new about it, it is going down a cliff since 10 years, in fact it marks the 11th year in 2026. People just refuse to acknowledge the facts because it impacts their personal decision to have moved here or not knowing where else to go, or being stuck.

People globally still seem to refuse to acknowledge simple hard statistics and numbers despite the outcome not changing for it. The entire covid era exposed this by far, most act as sheeps waiting to be slaughtered.

It is beyond naive at this stage to think that problems magically resolve themselves or that it will all get better in some years again.

Tourism spending will drop even more in Thailand if the VAT is increased. No point in comming in that case for shopping. As for the VAT refund it's just a scam as much of the stuff bought cannot be taken in hand luggage. So you must check in after doing the first phase of the refund process. But the final refund process in after all the security checks etc and then if you fall on a trouble making person in the counter who will ask to see the stuff for the refund, of course you would have checked it in and then you have plainly stood for an hour in the queue for nothing.

On 4/21/2026 at 11:40 AM, ChaiyaTH said:

Nothing new about it, it is going down a cliff since 10 years, in fact it marks the 11th year in 2026.

I've been coming to Thailand since 2016, and yes - every year it has been getting more expensive, with the exception of Covid that did a "reset" for a couple of years, but then prices quickly accelerated back. Today's rents in Bangkok are almost the same as 2019, and nightlife is much more expensive. Even worse in Pattaya - prices pretty much doubled for some things. Clubs VIP used to be 6000 minimum - now 10000 and up, bar fines used to be 1000, now 2000, etc.

The reason for the "inflation" isn't that Thailand is actually getting more tourists that spend - it is because it is getting large numbers of tourits that don't spend but landlords and owners are under the misguided perception that more tourists = more demand regardless of who the tourists are and where they spend. More Indians isn't going to create more demand for gogo bars or non-Indian nightclubs. It basically created a two-tier market where Indians go to their own spots and get cheaper prices by "sharing" (drinks and women), and gogo bars sit half empty because they priced themselves into oblivion. I was in Pattaya just before Songkran - went to a few gogo bars on walking street on a weekend night - they were almost empty other than us. I think a big part of it is the landlords and crazy rents on walking street, but something clearly needs to change.

A 42 percent tax increase sounds like another great idea by those in charge.

Smh. Ahhhh paradise.