The Finance Ministry is not seriously considering introducing a two-tier value-added tax (VAT) system as revenue collection in the 2022 fiscal year is expected to hit its targets, says Arkhom Termpittayapaisith.
The Finance Minister said that while many countries have adopted a two-tier tax system, he has yet to seriously consider the issue.
Mr Arkhom said the country needs to consider the economic situation before deciding if it is appropriate to impose such a tax system.
He added that Thailand's revenue collection for the 2022 fiscal year is expected to meet its targets, although the government has extended the diesel excise tax reduction to ease people's rising living costs.
Earlier the ministry's permanent secretary Krisada Chinavicharana said that revenue collection in the current fiscal year is expected to surpass the 2.4-trillion-baht target by around 70 billion baht.
Earlier a Finance Ministry source who requested anonymity said the ministry was considering the introduction of a two-tier VAT rate that could generate additional revenue of more than 100 billion baht.
The source added that the ministry studied the two-tier VAT rate a long time ago. The system would use the current effective 7% rate for general goods and services, with a higher rate for luxury items.
Thailand introduced the VAT system for domestic products and imported goods in 1992, with a current ceiling of 10%.
The source added that a two-tier VAT rate would be a way of increasing revenue as part of overall tax reforms.
Thailand has changed its tax structure many times over the years with a common theme of reducing rates, such as the top personal income tax bracket falling from 37% to the current 35%.
The country has run a budget deficit for 20 years amid huge infrastructure spending and rising government expenses.
Over the past two years the government introduced two emergency loan decrees to allow it to borrow 1.5 trillion baht to alleviate the effects of the Covid-19 pandemic on the economy.