No change to Thai VAT

BANGKOK Reports that Thailand would increase VAT, this year, were put to rest after the government confirmed it would not endorse a proposal to increase the tax from 7% to 8%.

An interim parliament’s committee on economics argued that raising value-added tax from the current rate of 7% to 8% would increase tax revenue by at least THB60 billion.

However, Deputy Prime Minister, Wissanu Krea-ngam, was quoted by Khao Sod news channel saying the government would not consider it.

“The government has not come up with this idea,” Wissanu told reporters, while attending a conference at Banyan Tree Hotel on Saturday.

It was good news for the tourism industry that feared a VAT increase would slow growth particularly in the domestic market if it was introduced this October.

Other taxes are likely to increase including one on booze that will have a direct impact on alcohol sales. Tourism executives would like to see the rules on alcoholic beverage consumption eased. The strict 1400 to 1700 ban on the sale of alcoholic beverages at restaurants and shops is viewed as detrimental to tourism and small-to-medium sized enterprises.

According to the Khao Sod report, the 8% VAT was proposed by the National Legislative Assembly, last Thursday along with other proposals such as taxing online vendors based overseas and introducing a new tax on properties that would benefit from new rail lines.

Critics argue that tax collection should be improved rather than introducing new taxes that could slow economic growth and place an increasing burden on households.

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