Finance Ministry urges government to mantain 7% VAT for another year

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BANGKOK-The Ministry of Finance is set to propose to the government to maintain a 7% value added tax (VAT) as the Thai economy is still recovering.

Permanent Secretary for Finance Somchai Sujjapongse said it was important to keep the VAT rate at the same level for at least one year despite the International Monetary Fund’s suggestion to raise the rate.

He said it would only discourage consumers from spending if the VAT rate was increased. The current rate will expire at the end of September. The Permanent Secretary stressed that the Thai economy still needed supporting factors to grow.

The VAT can be slightly adjusted once the economy begins to show signs of growth. The adjustment, he said, ought to be made gradually instead of adopting a big percentage leap as it would shock the economy.