E-books set for VAT exemption

E-books set for VAT exemption

GENERAL

The Revenue Department is set to propose extending value-added tax (VAT) exemption to e-books to help promote education.

Electronic media are playing a greater role, while sales of e-books emain subject to 7% VAT, unlike newspapers, magazines or textbooks, Revenue Department director-general Prasong Poontaneat said.

The department will propose that Finance Minister Sommai Phasee endorse a ministerial announcement scrapping VAT for e-books so people can access knowledge at a lower cost.

Print media, farm products, animal feed, medicines, chemicals for animals and crops, air transport and fuel transport via pipelines are also exempt from VAT.

The government is mulling an increase in the VAT rate next year to finance a loosening of fiscal policy.

Despite private sector concerns, Mr Prasong does not believe a VAT hike will affect domestic consumption if the rise is not significant.

However, a VAT increase could hurt spending on luxury products, he said.

Prime Minister Prayut Chan-o-cha on Tuesday rushed to soothe businessmen's worries by saying the government had not yet reached a decision on VAT and that the tax would be raised only when the economy was in better shape.

Mr Sommai on Monday had said VAT might be raised by at least one percentage point next year.

His remarks sparked fears among the private sector, with most business people saying the increase would hurt consumers' already-weak purchasing power.

The National Council for Peace and Order earlier approved an extension of the 7% rate for another fiscal year to Sept 30, 2015 with the aim of smoothing domestic consumption, which has faltered since the second half of last year.

A VAT increase will be next on the agenda after the inheritance and land and buildings taxes have won National Legislative Assembly approval.

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