VAT was first introduced in Thailand in 1992 at a rate of 10%, but it was reduced to 7% during the 1997 financial crisis and has remained at 7% ever since, reports the Bangkok Post.
The law calls for the rate to be reviewed annually, but no government has wanted to take the politically unpopular step of raising it. Outgoing finance minister Pichai Chunhavajira floated the idea of a 10% rate as part of a broader reform of the tax system, but it was quickly shot down.
Caretaker deputy finance minister Julapun Amornvivat said on Tuesday (Sept 9) that maintaining the current VAT rate would be more beneficial for economic expansion.
Mr Pichai said earlier that the government had to balance the need to increase revenue with the burden to the public.
Pinsai Suraswadi, director-general of the Revenue Department, said the Fiscal Policy Office reported that other Southeast Asian nations have VAT rates ranging from 9% to 12%.