BANGKOK, THAILAND – The government announced a sweeping tax reform that promised relief for workers and low-income earners while preparing higher consumption taxes.
Mid-term fiscal plan sets stage for reform
Under the mid-term fiscal framework for 2027-2030, Finance Minister Ekniti Nitithanprapas said a fundamental restructuring of the tax system was planned, with a focus on easing the burden on employees and low earners. He pledged targeted relief as part of the reform package.
“We are examining the increase of tax allowances for employees and low-income earners,”
said Ekniti Nitithanprapas, finance minister.
Redistribution at the core of the package
At the same time, tax benefits for wealthy taxpayers and higher income brackets were set to be reduced, aiming at what the minister described as real redistribution. Behind the plans was more than electoral strategy, he stressed, pointing to concerns over national stability.
“We do not want to make this a political issue. This plan is necessary for the stability of the nation.”
said Ekniti Nitithanprapas, finance minister.
Cabinet backs broad changes to revenue and spending
A cabinet decision on Tuesday approved extensive changes that went beyond tax adjustments to include higher revenues and more efficient public spending. The minister said public investment would increase, while unnecessary duplicate expenditures would be cut to ensure that every baht was used carefully.
“The goal is the well-being of everyone in the country,”
said Ekniti Nitithanprapas, finance minister.
Gradual VAT increase to offset higher spending
The reform also contained unpopular elements, notably a step-by-step rise in value-added tax. The VAT rate, currently 7%, was to increase to 8.5% and reach the statutory ceiling of 10% by 2030 to compensate for higher government outlays.
Officials framed this as a dilemma between tax relief and budget consolidation, as the government sought to protect fiscal stability. According to the plan, the economy was expected to reach its full growth potential by 2028.
Trade talks with US run alongside tax agenda
In parallel with the tax overhaul, key trade negotiations with the United States were under way, coordinated by Ekniti.
“I will discuss the progress with Commerce Minister Suphajee Suthumpun,”
said Ekniti Nitithanprapas, finance minister.
Prime Minister Anutin Charnvirakul was reported to be in direct contact with US President Donald Trump as part of efforts to diversify exports in line with the broader economic strategy.