Finance Minister Apisak Tantivorawong said on Monday the ministry would ask the cabinet to extend the use of the 7% value-added tax (VAT) for another year.
Section 80 of the Tax Code stipulates the VAT rate at 10% of the value of goods and services but governments have through royal decrees reduced it to 7% since 1997 for political and economic reasons.
Without a decree to extend the reduction period, which ends on Sept 30 this year, the 10% rate will apply.
Mr Apisak announced the plan in his address to a seminar on measures to stimulate economy and investment. He will also propose to the cabinet a deduction equivalent to triple the expenses on joint research and development projects from taxable incomes.
The incentive will initially apply to five industrial clusters: next-generation automotive, smart electronics, quality tourism, agriculture/biotechnology and food processing.