Bangkok (VNA)💜 – The caretaker Cabinet of Thailand has approved an extension of the current value-added tax (VAT) rate, keeping it at 7% for another year instead of reverting to 10%.
The prolonged reduction will be in effect from October 1, 2025 through September 30, 2026.
Explaining the decision, Thai Deputy Minister of Finance Chulaphan Amornvivat said that the caretaker government feared that if the decision were deferred to the newly appointed Cabinet under Prime Minister Anutin Charnvirakul, it would be too late, and consumers would be forced to pay the 10% VAT starting October 1.
Earlier, Thai Deputy Prime Minister and Finance Minister Pichai Chunhavajira said in an interview that the government needs to consider the need for state revenue and the potential burden on the people. He acknowledged that Thailand has maintained a VAT rate of 7% for more than 20 years, while many countries have gradually increased it.
However, Pichai said that although 7% is considered low by regional standards, raising the tax in the context of a weak economy may not be the right time. Therefore, if the government wants to increase VAT in the future, it must ensure that the tax revenue is used for investment, job creation or support for low-income earners, not just to reduce public debt.
For businesses and consumers, this measure will help maintain the price of goods and services at current levels, easing the pressure from rising costs in the context of an economic downturn, Pichai said. This is a positive signal showing that the Government continues to prioritise stimulating domestic spending./.
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