Plan 7% VAT on imported goods from May

From The Thaiger

The Thai government, under the directive of Prime Minister Srettha Thavisin, is preparing to implement a 7% value-added tax (VAT) on imported goods valued at 1 baht and above, starting in May.

Currently, goods sold for less than 1,500 baht (US$40) per parcel and imported into Thailand are exempt from VAT. Deputy Finance Minister Julapun Amornvivat announced these plans after yesterday’s Cabinet meeting, asserting the new VAT collection is a move towards fairness for Thai small businesses.

“VAT collection is to ensure fairness for small businesses in Thailand, as both foreign and domestic operators will have to pay taxes at the same rate.”

The new tax measure is endorsed by Thanawat Malabuppha, honorary president and advisor of the Thai e-Commerce Association, who believes it will enhance the competitiveness of local small and medium-sized enterprises (SMEs). He noted that low-priced Chinese goods, sold on e-commerce platforms like Lazada, Shopee, and TikTok Shop, have flooded the Thai market, causing intense price competition and disadvantaging local SMEs.

The Federation of Thai Industries (FTI) has underscored the need for better protection against the influx of cheap Chinese products to maintain their competitiveness. Chairman of the FTI, Kriengkrai Thiennukul, revealed that the import of Chinese products has led some local manufacturers, especially SMEs, to slash production by 50%.