Thai Finance Ministry opposes NLA proposal to hike VAT rate

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Finance Ministry opposes NLA proposal to hike VAT rate

By The Nation

 

BANGKOK: -- The Finance Ministry is wary of the impact on the economy from the hike in value-added tax (VAT) proposed by the National Legislative Assembly (NLA) and plans to oppose it.

 

The NLA has suggested raising VAT from 7 per cent at present to 8 per cent.

 

Finance Ministry permanent secretary Somchai Sujjapongse said a hike in VAT rate will adversely impact the economy at a time when economic growth is accelerating. Gross domestic product growth in the first quarter was 3.3 per cent, he said.

 

He said the Finance Ministry is upgrading tax collection under the national e-payment project. This could help tax officials collect an additional Bt100 billion annually, he said.

 

The Finance Ministry will propose to the Cabinet to continue the current VAT rate at 7 per cent for another fiscal year, which ends in September, he said.

 

Before being reduced to 7 per cent, the VAT rate was 10 per cent. But successive governments have been wary of restoring the higher rate due to fear of a backlash from the public and its impact on the economy.

 

Source: http://www.nationmultimedia.com/news/business/30315664

 

-- © Copyright The Nation 2017-05-19

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No plan to hike VAT rate, says Somkid

By The Nation

 

File photo: Deputy Prime Minister Somkid Jatusripitak shakes hand with a robot at the TrueBusiness Forum 2017 “ Smart Thailand 4.0 at Siam Paragon Thursday.

 

BANGKOK: -- Deputy Prime Minister Somkid Jatusripitak said on Friday that the proposal to increase value-added tax (VAT) was an old one and the public should not worry about it.

 

He was referring to the proposal by the National Legislative Assembly on Thursday to increase the VAT rate to 8 percent from 7 per cent.

 

“The tax hike must come at the right time and in the right economic conditions,” he said.

 

The Finance Ministry will look into it, he added.

 

The NLA has reasoned that raising the VAT by 1 percentage point would bring an additional Bt60 billion to Bt70 billion revenue, as the current government revenue cannot match rising annual expenditure, resulting in widening budget deficit.

 

Source: http://www.nationmultimedia.com/news/breakingnews/30315687

 

-- © Copyright The Nation 2017-05-19

[Searat7]

They should have been increasing VAT by .5% a year for a few years now. This would be relatively painless.

[Srikcir]

NLA has the responsibility to try to reduce debt that would deter inflation. But increasing debt incurred by the military led government may be a detriment to counter such efforts. So what the NLA and Minister of Finance see are more revenues through tax increases and better tax collection. But their perspective, while correct, is very narrow thinking.

 

The Finance Ministry has implied that the government is losing at least Bt 100 billion tax revenues through legacy  payment system.  Upgrading tax collection under the national e-payment project to improve collection does not cost the taxpayer anything more than what is a taxpayer's current fair tax obligation. NLA should then first look to further streamlining the whole revenue taxation system for improved efficiency, ie., better audits, improved tax assessment tracking, tax payment verification systems and more penalties for tax defaults. The cost of these broader solutions are virtually cost-free to the taxpayer. Improved tax collection is critical for meeting budgetary demands but it's the "tail-end" of the whole taxation process.

[Get Real]

So! Now the VAT is a problem. When are we going to focus on the real ones?