Anucha Buraphachaisri, spokesman for the Prime Minister's Office, said that Thailand had set the VAT rate at 10 per cent under the Revenue Code since the change from the trade tax system to the VAT system in 1992, but the VAT rate had been mitigated.

In the past, the Cabinet would periodically issue a Royal Decree to reduce the VAT to 7 per cent, but the rate was raised to 10 per cent only during the Tom Yam Kung financial crisis of 1997.

Anucha said that each country had different VAT rates. For example, Indonesia, Vietnam and Japan collect VAT at 10 per cent, Singapore collects 7 per cent, Malaysia 6 per cent, while Thailand collects 7 per cent which is in accordance with the economic situation, to lessen the burden on the public and stimulate economic growth as well.

Government to maintain VAT rate at 7 per cent

The government has no plan to hike the value-added tax (VAT) in order to achieve the gross domestic product growth target this year of 4 per cent, a senior official said.