Additionally, under the plan, the VAT rate will be increased to the full legal ceiling of 10% in 2030, he said, reports the Bangkok Post.
Adjusting the rate and reducing expenditure are part of the Finance Ministry’s plans to strengthen medium-term fiscal stability.
Speaking at Money Expo 2025 Bangkok Year-End on Thursday (Nov 20), Mr Ekniti said that the ministry has outlined its medium-term fiscal framework (MTFF), which includes a gradual increase in VAT by 2028.
"I believe that by 2028, Thailand will be able to return to its full growth potential. That may be the right time for us to begin gradually raising VAT," he said.
Mr Ekniti noted that the VAT increase is included in the MTFF, which was approved by the Cabinet on Nov 18.
The MTFF aims to demonstrate to domestic and foreign investors that there is confidence in the government’s fiscal position. The MTFF also states that if the government cannot raise the VAT rate, it will adopt alternative measures to reassure both foreign and Thai investors that the government’s fiscal position remains sound.
Mr Ekniti said two rating agencies -- Moody’s and Fitch Ratings -- have revised Thailand’s outlook to negative from stable, while S&P Global Ratings has not changed its outlook because it trusts the government’s fiscal-discipline plan.
He said the two agencies revised Thailand’s outlook because the country’s fiscal deficit is higher than international norms -- exceeding 3%. In the last fiscal year, Thailand’s deficit reached 4.4%. Under the MTFF plan, the deficit must be brought below 3% of GDP by 2029 to restore confidence in the government’s fiscal health.
In addition to tax-reform measures, such as the VAT increase, the MTFF also includes plans to reduce spending, use the Thailand Infrastructure Fund and expand public-private partnerships to support public investment and ease fiscal burdens.
On expenditure reduction, the minister said the cabinet has directed the Finance Ministry and the Budget Bureau to prepare a plan to eliminate redundant spending.
For example, overlapping welfare schemes run by multiple agencies may need to be consolidated into a unified welfare system, supported by inter-agency data connectivity to cut duplication.
Mr Ekniti also referred to a stimulus package soon to be submitted to the cabinet: an SME-promotion package covering loans, loan guarantees, tax measures and initiatives to help SMEs gain greater access to government procurement and bidding.
He said the government will launch a "big brothers help little brothers" programme to encourage large corporations to support smaller businesses, backed by tax incentives.
He also discussed measures to support retirement savings, saying that the government plans to adopt the Stock Exchange of Thailand’s concept of the Thailand Individual Savings Account to replace the retirement mutual fund, the Super Savings Fund and the Thailand ESG Fund.