No VAT rate increase says Thailand's PM

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No VAT rate increase says Thailand's PM 
Bangkok Post: 14 Dec 2010
VAT rate of 7% will not change, says PM

Prime Minister Abhisit Vejjajiva insists there will not be an increase in the value-added tax for at least another 10 years.

The prime minister said yesterday his government had no plans to increase the VAT to fund its spending even though budget expenditure was expected to rise to 3 trillion baht by 2019, from 2.07 trillion baht in the present 2011 fiscal year.

It has been reported by some media outlets that the Fiscal Policy Office is planning to restructure the country's tax system - by raising the VAT from 7% to 10%.

The Chavalit Yongchaiyudh government raised the VAT briefly in 1997 to the legal maximum of 10%, but it was returned to 7% soon after by the Chuan Leekpai government when it became clear the increase was deepening the economic recession by depressing consumption. Successive governments have since approved temporary extensions of the 7% VAT rate every few years.

Mr Abhisit said the tax system needed to be restructured to pay for increased government spending.

He said he wanted to see the government running a balanced budget by 2016.

This would not require an increase in the VAT rate as the rise in other tax revenues and economic growth were sufficient to allow the government to eventually run a balanced budget, Mr Abhisit said.

The government this year has managed to collect 1.8 trillion baht in tax revenue, 200 billion baht below its target.

The Finance Ministry is launching new tax schemes, Mr Abhisit said, ranging from an assets tax, land tax and entity tax under the supervision of the Board of Investment.


http://www.bangkokpost.com/news/local/211130/vat-rate-of-7-will-not-change-says-pm