Thailand’s Cabinet has approved a one-year extension of the country’s reduced 7% value-added tax (VAT) rate, keeping the current rate in place until 30 September 2027 in a move aimed at supporting household spending and maintaining economic stability. The decision was approved in principle at the Cabinet meeting on 27 July, following a proposal from the Ministry of Finance. Government spokesperson Ratchada Thanadirek said the extension will take effect from 1 October 2026, immediately after the current measure expires on 30 September 2026. VAT to remain at 7% Under the draft Royal Decree issued under the Revenue Code, VAT will remain at 6.3%, excluding local tax, or 7% including local tax, on the sale of goods, the provision of services and all imports. Thailand’s standard VAT rate under the law is higher, but successive governments have repeatedly extended the temporary reduced rate for many years as part of broader economic support measures. According to Ratchada, maintaining the current rate is intended to reduce pressure from the rising cost of living, encourage consumer spending and help strengthen confidence in Thailand’s economy. She said the government also expects the measure to support private sector investment and create a more favourable business environment. The measure is also expected to provide continuity for retailers, hospitality businesses and service providers that rely on domestic spending and international visitors, sectors that remain important contributors to Thailand’s economy. The Cabinet’s approval is for the draft decree in principle. Once it comes into force, the reduced VAT rate will remain effective from 1 October 2026 until 30 September 2027. Join the discussion? 28 July 2026
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