Finance Ministry opposes NLA proposal to hike VAT rate
May 19, 2017 11:01 By The Nation
The Finance Ministry is wary of the impact on the economy from the hike in value-added tax (VAT) proposed by the National Legislative Assembly (NLA) and plans to oppose it.
The NLA has suggested raising VAT from 7 per cent at present to 8 per cent.
Finance Ministry permanent secretary Somchai Sujjapongse said a hike in VAT rate will adversely impact the economy at a time when economic growth is accelerating. Gross domestic product growth in the first quarter was 3.3 per cent, he said.
He said the Finance Ministry is upgrading tax collection under the national e-payment project. This could help tax officials collect an additional Bt100 billion annually, he said.
The Finance Ministry will propose to the Cabinet to continue the current VAT rate at 7 per cent for another fiscal year, which ends in September, he said.
Before being reduced to 7 per cent, the VAT rate was 10 per cent. But successive governments have been wary of restoring the higher rate due to fear of a backlash from the public and its impact on the economy.