Bangkok: Pichai has not yet approved collecting VAT for businesses with income below 1.8 million baht. The entire system needs to be reviewed. Deputy Prime Minister and Finance Minister Pichai Chunhavajira spoke about the idea of improving the collection of Value Added Tax (VAT) by requiring businesses with incomes of less than 1.8 million baht per year but more than 1.5 million baht per year to pay 1% VAT. He said that the entire system must be reviewed.
According to Thai News Agency, when asked if this would affect small businesses in the current economic climate, Pichai waved his hand and refused to answer. When asked when the review would be completed, Mr. Pichai said that it had not been decided yet and that everything had to be considered first.
Reporters reported that Mr. Pichai previously mentioned the idea as an improvement in the collection of Value Added Tax, seeing that many new generations have turned to doing business but submitting income forms lower than 1.8 million baht per year in order to avoid having to pay VAT. Therefore, it is being considered that in the case of businesses with income of 1.5 million baht/year or more, it may be increased to Type 2 Value Added Tax like in Europe, and may request to collect VAT at 1% of income. It is expected that this will increase the state’s income by about 200 billion baht, reducing the state budget deficit from the current deficit of 4.4% of GDP to only 3.5%.