Anutin rules out VAT hike to 8.5%, insists rate will stay at 7% while economy recovers
PM Anutin says VAT will not increase from 7% despite long-term plans, stressing Thailand’s fragile recovery and easing fears of higher living costs.
Prime Minister and Interior Minister Anutin Charnvirakul has dismissed concerns over a planned rise in value-added tax (VAT) to 8.5%, insisting that the current 7% rate will remain unchanged while the country is still recovering.
He explained that, under Thai law, VAT should be collected at 10%. The long-standing rate of 7%, he said, has been possible only because successive governments have issued exemptions in response to economic and social conditions.
Regarding the outline to raise VAT to 8.5% by 2028 and to 10% by 2030, Anutin said the figures were part of a long-term fiscal projection aligned with legal requirements. “In reality, there is no need for concern. There will be no VAT increase at this time,” he said.
He added that as long as he remains involved in steering the country’s administration, VAT “will definitely not increase” and will stay at its current rate. Thailand, he said, is still in the midst of rebuilding and strengthening its competitiveness on the global stage.
Asked again whether a VAT rise was firmly off the table, Anutin replied: “Absolutely. There will be no increase.”
His comments follow mounting anxiety from the restaurant industry, which warned that raising VAT now would impose excessive pressure on businesses and drive up inflation, worsening the cost of living for the public.
The government’s medium-term fiscal restructuring plan aims to reduce the budget deficit to below 3% of GDP by fiscal 2029, partly through a gradual VAT rise from 7% to 8.5% in 2028 and eventually to 10% in 2030.
Sorathep Rojpotjanaruch, chairman of the Restaurant Business Club, acknowledged the need for fiscal stability but urged the Cabinet to reconsider applying the increase across all sectors.
“I do not object to the VAT increase, but I ask for a review of its implementation in specific business sectors. It could significantly raise domestic living costs and fuel inflation, particularly in the restaurant industry and food products,” he said.
