B1.8m level may be omitted.
PUBLISHED: 2 Perhaps 2025 at 05: 46
To boost state income and lessen budget deficits, Finance Minister Pichai Chunhavajira on Thursday proposed levying value-added tax (VAT ) on businesses with fewer than 1.8 million baht per annum.
Businesses that generate that much in a year or more are now required to pay VAT in addition to additional taxes.
The finance secretary suggested introducing “VAT Category 2” as it is now practiced in some Western nations. Companies with annual revenues of 1.5 million baht would make an additional 200 billion baht in revenue if they paid 1 % VAT.
To evade paying VAT obligations and to give only personal income tax, Mr. Pichai claims that young entrepreneurs typically report revenue below the 1.8 million-baht threshold.
A business making an annual income of 1.5 million baht is allowed to deduct expenses at 60 %, with the remaining amount being subject to personal income tax, resulting in a tax payment of just over 10,000 baht annually.
He claimed that by expanding the VAT base, the government could reduce the current budget deficit from 4.4 % to 3.5 % of GDP, adding that the increased revenue could be used to fund investment projects.
According to Mr. Pichai, finding fresh sources of income to offset fixed fees, especially the pay of nearly three million civil workers, is challenging.
Compared to the government’s peak of 17 %, the government’s tax revenue is only collecting 15.5 % of GDP right now.
He claimed that one way to reduce household debts, which is estimated to be 16.4 trillion baht, would be to increase private buying power. 1.2 trillion ringgit is categorized as non-performing mortgages, which affect about 5.4 million debtors, out of this sum.
According to Mr. Pichai, 3 million of the country’s 5.4 million borrowers each owe less than 100,000 ringgit, and the government intends to pay these debt in three months.
He claimed that financial institutions may be asked to rebuild the debt and that the ministry would provide delicate loans to those with NPLs greater than 100 000 baht.
Additionally, Mr. Pichai claimed that the government’s goals are to increase farmers ‘ money by increasing rice production performance. He added that reducing the number of rice-growing regions by 15 million ray may result in a rise in business prices and provide.