On July 27, Rachada Dhnadirek, Government Spokesperson, announced that the Cabinet meeting has approved in principle the draft Royal Decree under the Revenue Code regarding the reduction of value-added tax (VAT) rates as proposed by the Ministry of Finance. The measure aims to extend the period for reduced VAT rates for another year.
Ratchada stated that the core objective of this measure is to prolong the current reduction in VAT rates, which was set to expire on September 30, 2026, for an additional year—from October 1, 2026, to September 30, 2027.
The VAT rate will continue to be set at an excluded local tax of 6.3%, or a 7% if including local tax. This rate applies to all sales of goods, provision of services, and imports from a ceiling of 10%.
Maintaining the VAT rate at 7% will lessen the burden of living costs, boost consumer spending, and enhance business confidence in the Thai economy. This will support private sector investment growth and foster a positive business environment for the private sector, Rachada stated.
Thailand VAT rate was set at 10% according to the Section 80 of the Revenue Code, but the rate was effectively reduced to 7% with the 1991 Royal Decree, and the reduction has since been extended until present, except for a brief period between 1997 – 1999 when Thailand was recovering from the Asian Financial Crisis.
