We will pay through future VAT hikes
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Take a very successful country that is already growing at between 5 and 7 per cent GDP a year and with a low debt ratio of around 40 per cent. Then coerce it to join Asean, the Southeast Asian equivalent of the European Union - sponsored by the same group
In order to “take its rightful place in the new Asian Economy”, Thailand has now agreed to take on a massive loan from the World Bank. The interest will be Bt3 trillion on a loan of Bt2 trillion, meaning the country will have to repay more than Bt5 trillion over the next 50 years, pushing the debt level past 60 per cent.
A government spokesman said, “When the economic situation picks up, people will be ready to afford a higher VAT rate. A rise in the VAT rate by 1 percentage point would generate additional income for the government of Bt50 billion per year.” So, for the next 50 years, taxpayers will be forced to pay more.
“The rate would not remain at 7 per cent over the next seven years, but the precise hike would depend on the economic situation and whether the government needs to use VAT income as its main revenue.”
This was the same funding method used by the European Union, where VAT rates started at 7 per cent but are now above 20 per cent in most EU countries.
Michael Meakus
Bangkok
