Vat 9 % As Of Oct 1, 2008 ?

[moo9]

This morning I got some information, that the VAT will be increased to 9 % as of Oct 1, 2008.

For the interim period from October 1, 2007 - September 30, 2008 a special reduced VAT of 6.3 % will be applied (instead of the current 7 %).

My god, they are making things complicated.

Has anyone an official information in English yet?

PS: Sorry the heading is wrong, not Jan 1st, but Oct 1st 2008

Edited September 11, 2007 by monty
Corrected the heading! Monty

[cclub75]

This morning I got some information, that the VAT will be increased to 9 % as of Oct 1, 2008.

For the interim period from October 1, 2007 - September 30, 2008 a special reduced VAT of 6.3 % will be applied (instead of the current 7 %).

My god, they are making things complicated.

Has anyone an official information in English yet?

PS: Sorry the heading is wrong, not Jan 1st, but Oct 1st 2008

No news. But it's the Loch Ness Monster since a long time.

Initially, if I remember, it could have been hiked this year.

I guess, the Junta -cautiously and wisely- decided that it was probably not the good time...

For sure, it will come back. They need it too badly.

Right now, VAT is already 40 % of total government revenues.

Edited September 11, 2007 by cclub75

[xbusman]

I think it is supposed to be 10% now but is on "special" reduction at least over the past five years. It was scheduled to return to 10% this year but talk about throwing gasoline on a raging fire. They have wisely postponed this for the time being. I would be interested if this is coming up again.

[cclub75]

However, the 6.3 % idea for an interim period sounds totally new. Where have you heard that ?

I guess it would have been already an official announcement if it was scheduled for the first october of this year, no ?

[Irene]

This morning I got some information, that the VAT will be increased to 9 % as of Oct 1, 2008.

For the interim period from October 1, 2007 - September 30, 2008 a special reduced VAT of 6.3 % will be applied (instead of the current 7 %).

My god, they are making things complicated.

Has anyone an official information in English yet?

PS: Sorry the heading is wrong, not Jan 1st, but Oct 1st 2008

No, that is incorrect! The message is the VAT shall remain as 7% from Oct. 1, 2007-September 30, 2008. Thereafter, it will revert to 10% as per statue.

EXPLANATIONS: Per Thai tax code, the Vat is to be imposed at 9% but this 9% is subject to an additional tax called Municipality Tax at 10% of the sum of VAT plus municipality tax i.e. 10% of 9 + 1=1. This rate of 9% was stated in the statue right from day one when the VAT was introduced. But the rate has been reduced through yearly decrees to 6.3% up until now.

6.3% is again subject to Municipality Tax at 10% of the sum of VAT plus municipality tax i.e. 10% of 6.3 +0.7= 0.7% and 0.7% + 6.3% = 7%.

As for Oct 1, 2008, whether the 10% shall apply depends on the then government whether it wishes to continue to reduce to 7% by then. They have to announce that before Oct. 1, 2008.

I also misunderstood that announcement until my legal friend explained the part of municipality tax to me. Yes, they do make life difficult.

[xbusman]

I dont think they can get the VAT back up to 10% in this economy. This kind of talk does make it hard to plan, but I am counting on it remaining at 7% through 2008. My accountant reports that the current extension of the 3% reduction is due to expire Oct 1 and is only up for discussion. That would make sense with the fiscal year ending.

For a caretaker government, they do seem intent on inflaming a lot of difficult situations without regard to the consequences, lets hope this is much to do about nothing.

[moo9]

Hi,

confusing issue. My staff send me this document today, sorry I can't read Thai. Maybe we have somebody here for proper translation, to enlighten us....

tax.pdf

Edited September 11, 2007 by moo9

[andy1308]

Hi,

confusing issue. My staff send me this document today, sorry I can't read Thai. Maybe we have somebody here for proper translation, to enlighten us....

I had the same document supplied to me late yesterday evening, and from what I have been told it says the rates will reduce to 6.3% from 1st October 2007 until 30th September 2008 for product sales and services. Of course this being Thailand it's only become apparent three weeks before implementation.

[Firefan]

Prices have went up fast in the last several years. I do certainly not believe the official inflation nos (around 5%/year) at all, and neither do my Thai friends.

The vat is an end consumer tax, meaning that the end impact on the consumer will normally be more than the 7 or 10% due to "tax on tax" in the production/supply chain.

In short; higher prices for most, but worst for the end consumer. Not pretty.

Cheers!

Ps. now we can wait for the first poster to bring up how little 10% is compared to the 20-25% in their home country....sigh....

[Naam]

The vat is an end consumer tax, meaning that the end impact on the consumer will normally be more than the 7 or 10% due to "tax on tax" in the production/supply chain.

the sky is falling. for sure!

[Firefan]

He,he - probably not Dr. Naam, simply another inflation booster on top. Cheers!

[Irene]

I dont think they can get the VAT back up to 10% in this economy. This kind of talk does make it hard to plan, but I am counting on it remaining at 7% through 2008. My accountant reports that the current extension of the 3% reduction is due to expire Oct 1 and is only up for discussion. That would make sense with the fiscal year ending.

For a caretaker government, they do seem intent on inflaming a lot of difficult situations without regard to the consequences, lets hope this is much to do about nothing.

You got your wish of 7% up to Sept 2008.

[moo9]

Hi,

confusing issue. My staff send me this document today, sorry I can't read Thai. Maybe we have somebody here for proper translation, to enlighten us....

I had the same document supplied to me late yesterday evening, and from what I have been told it says the rates will reduce to 6.3% from 1st October 2007 until 30th September 2008 for product sales and services. Of course this being Thailand it's only become apparent three weeks before implementation.

Wait and see, I asked my people to investigate further. Well Oct 1st is coming soon, we need to know well ahead to adjust our system.

Amazing Thailand.

[Naam]

He,he - probably not Dr. Naam, simply another inflation booster on top. Cheers!

will the VAT be "racist" and hit us farangs only?

[cclub75]

I had the same document supplied to me late yesterday evening, and from what I have been told it says the rates will reduce to 6.3% from 1st October 2007 until 30th September 2008 for product sales and services. Of course this being Thailand it's only become apparent three weeks before implementation.

Holly Molly !

Could you scan this doc ?

[Firefan]

Huh? Did I indicate that somehow? I even mentioned my Thai friends complaining about fast (faster than official inflation nos) rising prices.

That said; the consumers (be it Thai or foreigners) who spend the most will be impacted (measured in Baht) the most of course. Also; the ones that spend in shops/supermarkets that actually use/report VAT will of course be affected more than people shopping at "no tax" markets or swapping a goat for 5 chickens (I think that is the going rate ).

Cheers!

He,he - probably not Dr. Naam, simply another inflation booster on top. Cheers!

will the VAT be "racist" and hit us farangs only?

[cclub75]

False alert.

Actually, there is a change of the repartition...

Revenue Dpt will give 6.3 % of VAT to Finance Ministry and 0.7 % to the... local government.

Therefore, total rate doesn't change and stay at 7 %.