Finance Minister discounted 7% will return to 10% between 2028 and 2030
Thailand is proposing a return to a 10% standard VAT rate from the current 7% as follows:
- Jan 2028 1.5% rise to 8.5%
- Jan 2030 1.5% rise to 10%
The rate was originally reduced from 10% to 7% in 1999, and there have been annual rollovers of the return back to 10%. The economy has recovered strongly from the effects of COVID, and the Ministry is keen not to add to the effects of inflation. The Finance Ministry forecast economic growth of 3.5 per cent this year looks likely to turn out at 2.4%. So the Cabinet is keen not to dampen this figure further as exports have failed to takeoff. This latest extension aims to mitigate the impact of living costs, stimulate consumer spending and boost business confidence in the Thai economy.
Longstanding VAT rise regularly postponed
Whilst the typical regional rate for South East Asia is 10% or above, Thailand has tax competition with the city-state of Singapore, which has a similar rate on its Goods and Services Tax rate:
- Indonesia – 11% (Indonesia VAT rise 2024)
- Philippines – 12%
- Vietnam – 10%
- Singapore – 7% (Singapore raises VAT to 9% 2024)
- Malaysia – 10%
VAT Calc’s global VAT and GST rates checker provides live indirect tax rates from around the world.
Sept 2025: Cabinet agrees extension to existing 7% rate; planned 3% rise delayed until at least 2026
Thailand’s caretaker cabinet has rolled over again the 7% VAT rate until September 2026 to help ease economic pressures and support consumption, according to Deputy Finance Minister Julapun Amornvivat.
VAT, introduced at 10% in 1992, was cut to 7% during the 1997 financial crisis and has stayed there since. Although the law requires yearly reviews, no government has risked raising it. Outgoing Finance Minister Pichai Chunhavajira recently suggested a return to 10% as part of tax reforms, but the proposal was quickly dismissed.
The minister highlighted that additional VAT revenue would not only help reduce public debt but also support investment and job creation, especially for smaller enterprises.
Oct 2024 VAT rise postponed again; Oct 2025 potential next date
The Thai cabinet on 17 September 2024 confirmed that the scheduled rise in VAT from 7% to 10% will not go ahead on 1 October 2024.
VAT was cut from 10% to 7% in 1999, with a return to 10% rolled over numerous times (see below).
