The Cabinet on Tuesday approved the extension of the 7% value-added tax (VAT) rate for another two years to help reduce the financial burden of consumers, enhance business confidence and boost economic recovery.
Deputy government spokesperson Rachada Dhnadirek said the rate would remain in force from October 1, 2021, to September 30, 2023. The 7% tax rate was set to expire on Sept 30 this year.
According to Ms Rachada, the7% rate of VAT will be collected on sales of goods, services, and all imports. The VAT was introduced in 1992 at a rate of 10%, but was slashed to 7% in late 1997 at the private sector’s request due to the Asian financial crisis.
Ms Rachada added that the 7% VAT extension is unlikely to greatly affect the state revenue collection during fiscal 2022 and 2023 because income estimates have been calculated in the budget preparation period. (NNT)