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Will There be an Increase in VAT in Thailand?

Transcript of the above video:

As the title of this video suggests we are going to be discussing the specific issue of will the VAT be increased in the Kingdom of Thailand anytime soon, or at all? 

I did another video on this channel about a year-and-a-half ago where I basically discussed the possibility of a VAT increase; I also did a Blog posting where I discussed recent announcements in things like The Royal Gazette pertaining to VAT and I actually got a lot of criticism for it because, well for various reasons.  But let me read a recent article if you will on thaivisa.com and then I want to get into my analysis of it and then go into my further analysis on this VAT issue over all. 

So Thaivisa.com, the article is titled:  VAT Remains Unchanged at 7%: Rumors Online Dismissed. This is posted Saturday, May 26, 2018. I am quoting parts of this directly. It would appear to also be a translation from prd.co.th, that's the Public Relations Department of the Thai Government, so I am just quoting various excerpts from this. “Regarding an article circulated in social media saying that the government had planned to raise the VAT from 7 to 8%, the spokesman said that it was only an old article published in March 2017 and that it had already been verified as inaccurate". Quoting further, "the sustained freeze to an increased VAT was primarily meant to keep the general public from being negatively affected, the government spokesman said. According to the taxation laws, the Government has to collect the VAT by 10%. However the Government has managed to keep it unchanged he said”. So I would urge folks to check this out, thaivisa.com or thainews.prd.go.th, but the English title is VAT Remains Unchanged at 7%: Rumors Online Dismissed.

So here is sort of my analysis on what is going on here. When we did the video before, I probably should have added some nuance with respect to this VAT issue. First of all when VAT was initially created, it was created and it was proposed and promulgated at 10%. However, they have put in temporary reductions as time has gone by and basically as a practical matter, VAT has remained at 7% essentially since its inception but it was done so, this 7% level was set only on temporary intervals, so on a yearly basis, it is technically up for review and generally speaking when reviewed, or at least up to this point in time, they have kept it at 7%. Now I am not going to go into a bunch of political discussion but there have been various folks within the Government who have made comments with respect to the raising of VAT. Generally speaking those comments were met with let’s say, criticism from the general public and for that reason to this point, in my opinion, VAT has not been raised. That being said can it be raised? Strictly speaking it can. It can be raised up to 10% because it was promulgated initially at a level of 10% it has subsequently been reduced on a temporary basis, usually on a year-to-year interval back down to 7. So could it be raised? Possibly. Does it seem like this Government is going to do that? Well this most recent announcement makes it pretty abundantly clear to me that they don't look particularly eager to do so, but that being said they have the ability to raise it up the question is, will they? I don't know. That is hard to answer. We will continue to do updates on the topic generally as time progresses especially if VAT increase looks to be in the offing or if a VAT increase is actually promulgated and people just have to deal with it after the fact that it has actually been raised.