THE CABINET has approved in principle a draft royal decree to be issued under the Revenue Code for extending the 7% VAT rate for another year from Oct. 1, 2025 till Sep. 30, 2026 to stimulate the economy, Naewna newspaper said this morning.
Mr. Pinsai Suraswadi, director-general of the Revenue Department, said the Finance Ministry, acting through his department, recognises the importance of building confidence and supporting continued growth of the national economy.
“This extension of the VAT rate reduction will help maintain domestic consumption levels, which will lead to the Thai economy expanding as targeted,” he said.
Meanwhile the Office of National Economic and Social Development Council (NESDC) has projected that the Thai economy in 2025 will expand within the range of 1.8 – 2.3 percent, with the midpoint forecast of 2.0 percent, decelerating from 2.5 percent in 2024.
The slowdown is primarily attributable to the anticipated decline in goods export volume in the second half of the year, following the implementation of US tariff measures set at 19 percent for Thailand. These measures are expected to exert downward pressure on the manufacturing sector amid the slowdown in the tourism industry.
In addition, the Thai economy continues to face constraints and risks from high levels of household and corporate debt, volatility in agricultural prices and production and uncertainties surrounding global trade and economic conditions.
Despite these challenges, several factors are expected to support economic activity in the latter half of the year. These include an increase in public investment expenditure, sustained growth in domestic consumption, and an improvement in private investment.
Private consumption and private investment are expected to grow by 2.1 percent and 1.0 percent, respectively, while the export value of goods in US dollar terms is projected to increase by 5.5 percent. Meanwhile, headline inflation is expected to remain within the range of 0.0 – 0.5 percent, and the current account is anticipated to register a surplus of 2.1 percent of GDP.
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Top and Front Page: A graphic image on the taxes and the economy by by Mathieu Stern on Unsplash
Insert: Revenue Department Chief Pinsai Suraswadi. Photo: Naewna
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