On Tuesday, the cabinet gave a decision to extend 7% value-added tax (VAT) rate continuously for the next two years to lessen the financial burden of the population, support business, and get the economy back on track.
Rachada Dhanadirek, a deputy government spokeswoman, said the 7% VAT will be retained until Sept 30, 2023.
The 7% tax rate was supposed to expire by this year, on September 30.
The VAT came into existence in 1992 with 10% rate, but was brought down to 7% by the late 1997 due to the private sector’s request.
According to Ms Rachada, the 7% VAT extension is unlikely to greatly affect the state revenue collection during fiscal 2022 and 2023.
The Finance Ministry told the cabinet on Tuesday that the pandemic impacted the Thai economy, around third quarter of 2020. , with a slump in private consumption, weakened consumer confidence and a obvious decline in tourism niche. All these are evident to cause the Thai economy to miss the ministry’s 1.5-2.5% growth target for this year.
In a separate development, the cabinet on Tuesday commanded the Tourism Authority of Thailand and the Tourism and Sports Ministry to improve the new phase of “Rao Tiew Duay Kan” (We Travel Together), a subsidy for hotels, and “Tour Teaw Thai”, which provides 40% compensation for domestic tour packages of up to 5,000 baht.
The cabinet also let the Export-Import Bank of Thailand to raise its registered capital by 4.18 billion baht to support the ismall and medium-sized enterprises, not only in Thailand but also abroad, focusing mainly on Cambodia, Laos, Myanmar and Vietnam, as well as new markets such as Indonesia, Malaysia and the Maldives.