Finance Ministry urges government to maintain 7% VAT for another year

BANGKOK, 15 April 2016 (NNT)-The Ministry of Finance is set to propose to the government to maintain a 7% value added tax (VAT) as the Thai economy is still recovering.

Permanent Secretary for Finance Somchai Sujjapongse said it was important to keep the VAT rate at the same level for at least one year despite the International Monetary Fund’s suggestion to raise the rate.

He said it would only discourage consumers from spending if the VAT rate was increased. The current rate will expire at the end of September. The Permanent Secretary stressed that the Thai economy still needed supporting factors to grow.

The VAT can be slightly adjusted once the economy begins to show signs of growth. The adjustment, he said, ought to be made gradually instead of adopting a big percentage leap as it would shock the economy.


-- NNT 2016-04-15

Why don't they change the legislated rate to 7% and let some brave government in the future change it back to the 10% it is supposed to be at some time in the indefinite future. This might discontinue this annual farce of the finance department recommending to successive governments that the rate stay at the discounted rate of 7% for another year. It is officially 10% and has been discounted since the Asian Crisis to help the economy recover, seems the economy is still rocky.

A 3% increase at one time could have bad consequences....when there is an increase it should be no more than 1% a year. If more people paid income taxes in Thailand an increase in the VAT would not be so important.

Thai economy still needed supporting factors to grow

Such as increased government investment that comes in part from tax revenues. Continuing to freeze the VAT isn't going to help.

The VAT was implemented in 1992 at 10% to replace some other tax, but shortly after the 1997 financial crisis (close to 20 years ago) it was lowed to 7%. When/if they ever raise the tax back-up it will be seen by many as a new tax to many people no matter how much the govt says it's always suppose to have been 10%.

It will have major political impacts if/when they do raise the VAT....I can't see the current regime giving it serious consideration other than the required annual review with all their other economic and political problems...it would be like just knowingly adding on another problem...shooting yourself in the foot.

Just make the farang tax 50%......the retirement extension will now cost 400,000 baht per year PLUS the 800,000 baht in the bank.

It would sort out the whining economic refugees on TV forum pretty damn quickly.

Hate the place...well there's your option.

Being from America the tax is already too high for me. As far as I am concerned they can raise it to any amount they want. I ain't going to buy it anyway.

Being from America the tax is already too high for me. As far as I am concerned they can raise it to any amount they want. I ain't going to buy it anyway.

If you are talking "VAT" the U.S. does not have a national VAT. Now the great majority of U.S. places do have state/local "sales" taxes probably averaging between 5 to 10% and in some of those states that state sales tax is the reason they do not have any state income tax (i.e., Florida, Alaska, Nevada, Texas, Wyoming, Nevada, Washington, etc).

If you don't want high VAT/Sales tax or Personal Income taxes (or a variety of other taxes) then be sure to not move to most any country in Europe. Take a look a this Wiki webpage list base tax rates of various countries...sort the columns various ways to rank order tax rates. European countries tax, tax, tax.

https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

Being from America the tax is already too high for me. As far as I am concerned they can raise it to any amount they want. I ain't going to buy it anyway.

If you are talking "VAT" the U.S. does not have a national VAT. Now the great majority of U.S. places do have state/local "sales" taxes probably averaging between 5 to 10% and in some of those states that state sales tax is the reason they do not have any state income tax (i.e., Florida, Alaska, Nevada, Texas, Wyoming, Nevada, Washington, etc).

If you don't want high VAT/Sales tax or Personal Income taxes (or a variety of other taxes) then be sure to not move to most any country in Europe. Take a look a this Wiki webpage list base tax rates of various countries...sort the columns various ways to rank order tax rates. European countries tax, tax, tax.

https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

Yea, you are 100% correct. The thing that helps me is i can order on line and not have to pay the sales tax from Texas. I find that in America if careful I can save a fortune on most electronic goods and the such. I usually go back every year with a list to fill before coming back. Love Thailand hate the VAT.

Thanks for the link, interesting.

The VAT tax here is MINIMAL. Obviously those complaining NEVER travel and are or maybe TRAPPED here so they complain.

The VAT is really nothing the the extremely HIGH import taxers and the fiddles the banks do to give you less Thai baht when exchanged. Yes I know many methods but I am looking at closing down here as the Thai baht is artificially strong against other currencies.

Go shopping and look at the prices of IMPORTED goods. then go to Singapore Hong Kong (REALLY expensive comparably but still cheaper than Thailand) Philippines, Malaysia. ALL cheaper and if we go supermarket shopping - well we save a lot more.

So a VAT at 10 or even 15% makes no difference. The sanctioned corruption makes a huge difference as they have to keep their friends and backers happy.

The VAT tax here is MINIMAL. Obviously those complaining NEVER travel and are or maybe TRAPPED here so they complain.

The VAT is really nothing the the extremely HIGH import taxers and the fiddles the banks do to give you less Thai baht when exchanged. Yes I know many methods but I am looking at closing down here as the Thai baht is artificially strong against other currencies.

Go shopping and look at the prices of IMPORTED goods. then go to Singapore Hong Kong (REALLY expensive comparably but still cheaper than Thailand) Philippines, Malaysia. ALL cheaper and if we go supermarket shopping - well we save a lot more.

So a VAT at 10 or even 15% makes no difference. The sanctioned corruption makes a huge difference as they have to keep their friends and backers happy.

Does the price of an air ticket/hotel/transport costs added to the unit cost still make it cheaper?

I think 10% is reasonable, and a 3% increase will not make a huge difference for consumers.

It's also easier to figure out the net tax once it becomes 10% again.

Edited April 16, 201610 yr by Shroud

I think 10% is reasonable, and a 3% increase will not make a huge difference for consumers.

It's also easier to figure out the net tax once it becomes 10% again.

I bet you the great majority of Thai consumers would disagree with you (and the Thai govt knows that...they just have to do this review every year since the reduction from 10% is a waiver and must be reapproved each year). Computers, calculators, cashier machines can just as easily calculator 7% as 10%.

VAT now 20% in UK.

Governments love VAT as it is a tax that retailers collect for them, and it is quite easy to administer and hard to fiddle. It means people who have ill gotten gains that they haven't paid tax on still contribute when they buy something.

So expect it to come back hard soon.

VAT is a regressive tax...impacts the poor more than the rich. But since the majority of Thais do not file/pay personal income tax the Thai govt must rely on VAT, excise, and import taxes as their major sources of tax revenue.