The Finance Ministry is likely to maintain value-added tax (VAT) at 7% for another year or two to help domestic consumption as the economy continues to struggle, says Krisada Chinavicharana, director-general of the Fiscal Policy Office (FPO).
The 7% rate for the VAT is set to expire on Sept 30.
The Finance Ministry earlier said the VAT might be raised by at least one percentage point this fiscal year to finance the government's planned budget deficit.
But the private sector cried foul, arguing that a VAT rise could weaken already paltry domestic consumption.
Whether the VAT will be kept unchanged is next on the ministry's agenda after the inheritance and land and buildings taxes.
The VAT was introduced in 1992 at a rate of 10% but was immediately slashed to 7% at the request of businesses, which felt the rate was too high.
Raising the VAT has proved challenging, as previous administrations opted to keep the rate for fear of losing popularity.
The ministry is eager to find more revenue for the government to finance hefty future public investment.
But the land and buildings tax has been put off again after the government cited the economic slowdown and possible effects on low-income earners.
Prime Minister Prayut Chan-o-cha recently warned that if the land and buildings tax failed to materialise, the VAT might need to be raised.
Last month the Finance Ministry granted approval for the Revenue Department, the main tax revenue contributor, to cut its collection target to 160 billion baht from 197 billion due to weakening global oil prices, shrinking revenue for large firms and falling import duties.
Thailand's economy has faltered since the second half of 2013, while a rebound is expected to be muted, with slower-than-expected public spending, tepid exports dented by a slow global recovery and weak domestic consumption hindered by swelling household debt.
On Friday, the Bank of Thailand is expected to revise down this year's economic growth forecast from 4%.
Separately, the FPO has proposed slashing withholding tax on service fees to 2% from 3% in order to boost private spending. The Finance Ministry's think tank estimates 2% will be an appropriate withholding tax rate.
The withholding tax cut proposal came after previous reductions in corporate and personal income taxes, Mr Krisada said, adding that a lower tax burden would boost taxpayers' liquidity and encourage them to spend more.
Withholding tax paid by individual taxpayers on service fees is similar to that for personal income tax, with the former totalling 270 billion baht in fiscal 2013 and the latter 299 billion.
By comparison, withholding tax paid by corporations amounted to 143 billion baht in 2013 or 24.2% of their actual corporate tax paid of 592 billion.