Finance Minister Proposes Lowering VAT Threshold to Boost Revenue and Reduce Budget Deficit

• Finance Minister Pichai Chunhavajira suggests collecting VAT from businesses with annual income below 1.8 million baht to increase state revenue and reduce budget deficits.
• Currently, businesses with income above 1.8 million baht are required to pay VAT.
• A proposed “VAT Category 2” could generate an additional 200 billion baht if businesses with 1.5 million baht income pay 1% VAT.
• Young entrepreneurs often report income below the threshold to avoid VAT and pay only personal income tax.
• Expanding the VAT base could reduce the budget deficit from 4.4% to 3.5% of GDP.
• Government tax revenue is currently 15.5% of GDP, down from a peak of 17%.
• Increasing domestic purchasing power involves addressing household debt, estimated at 16.4 trillion baht.
• The ministry plans to clear debts for 3 million debtors owing less than 100,000 baht each within three months.
• Financial institutions will be asked to restructure larger debts, with ministry support through soft loans.
• The government aims to raise farmers’ income by improving rice production efficiency and reducing cultivation areas to drive up prices.

Source: bangkokpost.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---