Thailand may be forced to raise its Value Added Tax rate from 7% to 10% as the region slows due to political unrest.
Thailand has held its VAT rate down to 7% as a temporary measure for some years. It has wanted to match the Singapore GST rate of 7%. However, the government ordnance prolong the reduced rate has now expired.
Whilst a 3% rise to 10% would in principle raise the required amount to fill next year’s projected deficit, there is a big problem with tax avoidance and the black market which might be exasperated with a higher rate. But the government is under pressure from the international credit agencies to act.
Read more: Thailand may face VAT rate increase » VAT Live.