Following the recent Cabinet meeting, Jirayu Huangsap, spokesperson for the Office of the Prime Minister, announced that the government has approved an extension of the current value-added tax (VAT) rate, keeping it at 7% for another year instead of reverting to 10%.
The prolonged reduction will be in effect from October 1, 2025, through September 30, 2026.
Thailand’s official VAT rate has been set at 10% since 1992, but in 1997, a royal decree temporarily lowered the rate to 7% during the “Tom Yum Kung” financial crisis to alleviate financial burdens on the public.
Since then, the reduced rate has been renewed every two years for the past 25 years, leading to repeated proposals from various sectors to restore the rate to 10%.
In August 2021, the Cabinet opted to maintain the 7% rate from October 1, 2021, to September 30, 2023, citing the need to sustain consumption and support business investment while the economy recovered from the COVID-19 crisis.
