BANGKOK, THAILAND – A Thai Senate committee proposed a wide‑ranging tax reform package to stem budget deficits and rising public debt, including raising value-added tax from 7 to 10 percent.
Why the Senate pushed for tax reform
The Committee on Economic, Financial and Fiscal Affairs of the Thai Senate met on 19 April under the chairmanship of Kamphol Supapaeng to discuss a restructuring of the tax system. The committee aimed to ease long-term fiscal pressures and said its proposals would be forwarded to the cabinet for review and possible implementation if approved.
According to the committee, Thailand had recorded continuous budget deficits for the past ten years, averaging 4 percent of gross domestic product. This meant the deficit stood above the 3 percent threshold often cited as a limit for fiscal sustainability.
VAT hike at the heart of the debate
In the area of consumption taxes, the committee proposed raising value-added tax (VAT) from 7 to 10 percent. The additional revenue was intended, among other purposes, to help finance social spending for an ageing population.
A VAT increase had already been floated in February but was rejected by the ruling Bhumjaithai Party. Party representatives said at the time that such an increase would not happen in the next two to three years because the government wanted to support living costs and the economy had not yet fully recovered.
Broader consumption taxes on trading, gold and VAT exemptions
In addition to the VAT proposal, the committee called for taxes on stock trading and on gold transactions, covering both physical gold and so‑called “paper gold”. It also recommended scrapping the VAT exemption for businesses with annual revenue of less than 1.8 million baht.
New income rules and taxes on the digital economy
On income-related taxes, the committee suggested a 2 percent withholding tax on sales conducted via e‑commerce platforms. It also discussed a 20 percent corporate tax for foreign digital companies such as TikTok, Alibaba and eBay, alongside the introduction of a global minimum tax of at least 15 percent by 2027.
Land and advertising levies targeting unused plots and signage
For asset and land taxes, the committee listed higher rates on unused land as one element of the reform. It further proposed expanding the signage tax to cover all outdoor advertising as well as political greeting banners displayed during festival periods.
Boosting tax collection with artificial intelligence
As a fourth pillar, the committee advocated deploying artificial intelligence at the Revenue Department to improve the efficiency of tax collection. It linked this to expectations that tax revenue could be better secured and administrative processes modernised.
Social and labour measures for an ageing society
In parallel with the tax package, the discussions also covered changes to social and labour market policies in response to demographic ageing. Proposals included raising the retirement age from 60 to 65 years by 2030.
The committee also mentioned higher tax allowances for children, set at 500,000 baht per child, as a way to encourage a higher birth rate.
Receipt lottery and “Home Town Tax” as incentives
Lawmakers discussed a receipt lottery system designed to motivate consumers to demand electronic tax invoices from businesses. Another proposal was a “Home Town Tax” policy, under which taxpayers could earmark donations for specific local areas to support community development.