Department wants VAT kept at 7% for another year
The Revenue Department plans to propose that the Finance
Ministry maintains value-added tax (VAT) at 7% for another year.
This would help boost consumer confidence as the economy is
picking up, said Prasong Poontaneat, director-general of the department.
The 7% VAT rate is due to expire at the end of September. Without
the 7% VAT renewal, the tax will be imposed at 10% of product and
VAT's contribution to government coffers is increasing, but the full-year
amount is expected to fall short of the target by 100 billion baht due
largely to the decline in VAT on imported goods, oil in particular,
said Mr Prasong.
The department has set the VAT target at 700-800 billion baht for
this fiscal year, ending Sept 30.
The largest tax revenue contributor also estimated that its tax revenue
will miss the target by more than 100 billion baht, but it tried to cap
the shortfall to below 150 billion baht, he said.
"In May, tax collection showed better signs. The tax revenue exceeded
the same period last year by 40 billion baht or 6%, but it was still
lower than the target by 30 billion baht. The tax items that were lower
than targeted are beyond our control -- chiefly VAT on imported oil,"
Tax incentives to comply with the government's recent policy also
hurt the department's revenue stream, said Mr Prasong, adding that
they are the income tax reduction for the single financial account
scheme and holiday tax breaks.
The Revenue Department is set to garner 1.90 trillion baht in tax revenue
for fiscal 2016, assuming that the oil price averages US$60 a barrel.
Due to the single financial account scheme, a set of tax perks offered
to attract small and medium-sized enterprises to pay tax correctly,
sales revenue reportedly rose by 6-10%, he said.
News,General,Bangkok Post,4 July 2016.
At 7% VAT rate some customers do not want Tax Invoice so if
VAT rate increase to 10% there will more procedure to avoid the
tax system,and will be lower the amount of tax receive.
At this point cost of living is high so as we want to picking up the
economy and boost consumer confidence,to remain VAT rate at 7 %
will help all the system and people.