Possible Cut On Value Added Tax

[sriracha john]

Possible Cut on Value Added Tax

Deputy Director-General of the Internal Trade Department Watcharee Wimuktayon stated that the Commerce Ministry may advise the Finance Ministry to cut the Value Added Tax, or VAT, to 3 percent from the current rate of 7 percent to help peg the prices of products necessary for people's living and help support the government's economic relief package.

Watcharee said the VAT's cut will help keep this year's inflation rate hovering at lower than 7 percent.

The Department's Director-General, Yanyong Punajraj, said the decision on the VAT cut must be made when the inflation rate is expanding by more than seven percent, but he believes such measures would help ease the burden of product providers.

Yanyong also pledged that his Internal Trade Department will keep a close watch on the direction of product prices and he insists their readjustments must be based on real manufacturing and operating costs.

Meanwhile, the Department's Director-General said the consumer product prices will be kept unchanged until year's end, while the prices of construction materials may be raised soon, following the surge in the prices of imported raw materials.

The Department's permission on the readjustment of construction material is intended to help prevent a supply shortage in the domestic market.

- Thailand Outlook / 27-07-08

[sibeymai]

a government voluntarily electing to reduce their tax revenue ? Have I died and gone to heaven ?

[sriracha john]

when coupled with the cut in gas taxes means a huge drop in revenue into the Treasury which equals what to disbursements from the Treasury..... ???

[lardy]

Possible Cut on Value Added Tax

Deputy Director-General of the Internal Trade Department Watcharee Wimuktayon stated that the Commerce Ministry may advise the Finance Ministry to cut the Value Added Tax, or VAT, to 3 percent from the current rate of 7 percent to help peg the prices of products necessary for people's living and help support the government's economic relief package.

Watcharee said the VAT's cut will help keep this year's inflation rate hovering at lower than 7 percent.

The Department's Director-General, Yanyong Punajraj, said the decision on the VAT cut must be made when the inflation rate is expanding by more than seven percent, but he believes such measures would help ease the burden of product providers.

Yanyong also pledged that his Internal Trade Department will keep a close watch on the direction of product prices and he insists their readjustments must be based on real manufacturing and operating costs.

Meanwhile, the Department's Director-General said the consumer product prices will be kept unchanged until year's end, while the prices of construction materials may be raised soon, following the surge in the prices of imported raw materials.

The Department's permission on the readjustment of construction material is intended to help prevent a supply shortage in the domestic market.

- Thailand Outlook / 27-07-08

Ooooooooooh I'm just about to buy a new car, is that a necessary item??? It would be nice if it was , I just bought another condo as the new laws came in for that taxwise this saved me a huge amount.

[lannarebirth]

The government will always pander to the oligarchy. The people can pay off the deficits later and the elite can move their profits elsewhere.

[boiledegg]

Surely a government couldnt think of such a idea all by themselves.

In the UK the country with highest car/fuel taxes in the EU we have had a further 2p rise in fuel duty em.... delayed.

[sriracha john]

An obvious misuse of verbage to call it a 3% cut, but you get the idea...

DIT proposes a 3-percent VAT cut

Deputy Director-General of the Internal Trade Department (DIT), Mrs. Watcharee Wimuktayon, said she will propose to the Ministry of Finance for a 3-percent VAT cut. She claims the move will help assist entrepreneurs and consumers amidst the economic crisis and help curb inflation.

To reduce costs of production for entrepreneurs, Mrs. Watcharee says it will also help lower costs of consumption for public members as well. According to this concept, DIT considers lowering VAT from 7 percent down to 3 percent. Mrs Watcharee further added that the idea was part of the government's 6 month relief package program.

Mrs. Watcharee also expresses her confidence that the 3-percent VAT cut measure will help curb inflation in Thailand.

- ThaiNews

[boiledegg]

I always wondered what the VALUE in VAT is, never known a tax that is value for money.

[sriracha john]

VAT tax cut proposed for consumer goods

The Commerce Ministry will propose cutting value-added tax (VAT) on consumer products from 7 per cent to 3 per cent for three to six months to help people cope with the cost of living, Internal Trade Department director-general Yanyong Phuangrach said yesterday. The proposal will be submitted to the Finance Ministry for consideration. It is aimed at easing the burden on consumers from rising oil prices and inflation, which reached 8.9 per cent last month. "The proposed temporary VAT cut would help consumers directly, immediately bringing down the price of goods," said anyong. Food and beverages would be the consumer segment most affected. Yanyong said the Internal Trade Department would also negotiate with providers of utilities to reduce charges to manufacturers to the same rate as paid by households. The department has sought cooperation from the manufacturers of products such as soap, toothpaste, detergent and palm cooking oil to keep their prices unchanged until the end of the year.

Continued here:

http://www.bangkokpost.com/breaking_news/b...s.php?id=129107

[TAWP]

So, will the prices be reduced at the same rate the taxes are dropped? Doubtful, stores don't tag prices without tax and re-labeling everything isn't going to happen...and Mom and Pop stores or market-stalls isn't going to reduce their prices with 75 satang or whatever...

[cclub75]

"War is a continuation of politics" said Clausewitz...

Well the latest "idea" of the thai bureaucrats and politicians, is a perfect continuation of their previous delirious decisions...

Everybody is missing the key word : "for 3 to 6 months"...

!!!!

I mean who can believe that a VAT divided by 2, on consummers products (and only, AKA already cheap products) for 3 to 6 months, could change anything ?

Although it would change a lot for the budget deficit.

Since a few months, the government knows only one thing : give away money.

It started with the so called "boost packages", tax cuts, village funds, followed by tax cuts on diesel and other fuels, and their obsessive prices controls policy (I should say : postponement)...

And all this... for a limited period of time...

The key question is : what will happen after ? in 6 months ?

[Scott]

I am perfectly happy to see this happen. I'll let the economists and the PAD supporters in the group argue it out as to why it's wrong!

[Plus]

Why that Deputy General doesn't mention the effect this would have on revenue collection, and on next year's budget.

Is it because it's not his department - not his problem.

Anyone knows what percentage of tax colletion comes from VAT? I think it's second only to corporate income taxes, which they to cut, too.

Anyhow, it's up to the new Minister, said to be Virabongsa, not the Deputy General.

[cclub75]

Anyone knows what percentage of tax colletion comes from VAT? I think it's second only to corporate income taxes, which they to cut, too.

2006. VAT = 40 %. Corporate = 35 %. Personal = 16 %

http://thaicrisis.wordpress.com/2008/02/25...will-stay-at-7/

http://www.rd.go.th/publish/6104.0.html

[Plus]

So we are looking at roughly 10% tax shortfall for the year, assuming they run it for six months.

[sriracha john]

I'm sure it will work out... it's not like Thailand needs any new schools or hospitals...

[cclub75]

I'm sure it will work out... it's not like Thailand needs any new schools or hospitals...

Nor... military budget increase.

High-ranking military officials yesterday requested a 17.8-per-cent budget increase for 2009 - Bt25 billion more than in fiscal 2008.

Bangkok Pundit

[PoorSucker]

Take away all VAT on gasoline and food (and lao khao )

Rise it for everything else.

[cclub75]

That's the beauty with Thailand : the left "brain" does not talk with the right "brain".

Deputy Prime Minister and Finance Minister Surapong Suebwonglee insisted on Monday that the Commerce Ministry's proposed cut in value-added tax from 7 per cent to 3 per cent is impossible in the current economic conditions.

He noted that the government has enforced several tax measures to stimulate the economy, and if VAT is reduced, it would deplete the government's revenue.

[cloudhopper]

Meanwhile, the Department's Director-General said the consumer product prices will be kept unchanged until year's end,

There you have it from the Crony-General.

Sorted.

[george]

Proposed VAT reduction rejected

BANGKOK: -- Deputy Prime Minister and Finance Minister Surapong Suebwonglee insisted on Monday that the Commerce Ministry's proposed cut in value-added tax from 7 per cent to 3 per cent is impossible in the current economic conditions.

He noted that the government has enforced several tax measures to stimulate the economy, and if VAT is reduced, it would deplete the government's revenue.

"VAT is a major source of revenue. For two years, we have delayed the increase in VAT to 10 per cent and instead focused on boosting the economy through higher tax deduction allowances, higher depreciation costs, and a cut in special business tax for the property sector. Inclusive of the six recently-endorsed measures, we have lost a large amount of revenue and there is no need to enact a tax measure to control product prices. Indeed, the lower fuel excise taxes should reduce costs and allow manufacturers to hold on the planned price increases," he said.

-- The Nation 2008-07-28

[sriracha john]

I guess even the soon-to-be fired doctor of finance realized that it was biting off more than it could chew....