The Royal Gazette has announced the Finance Ministry will begin collecting value-added tax (VAT) on all imported goods, including those priced below 1,500 baht, effective from July 5.
This measure aims to ensure fairness for domestic entrepreneurs who are subject to VAT, and is meant to comply with international agreements.
The ruling is effective until Dec 31, 2024.
On June 20, the website of the Royal Gazette issued an announcement from the ministry regarding the exemption of customs duties for items valued less than 1,500 baht, enforcing VAT collection on such imported items starting from July 5.
The reason for collecting VAT on imported goods priced from 1 baht to 1,500 baht is the government's policy to address unfair competition from cheap imported consumer goods, which are not subject to VAT.
Domestic sellers are required to pay VAT.
Thailand must also abide by international agreements that set minimum values for each imported item to ensure customs duty collection is worthwhile. Importers must follow the procedures specified by the director-general of the Customs Department.
The announcement was signed by Finance Minister Pichai Chunhavajira. The Customs Department will collect the VAT until Dec 31, 2024, then the Revenue Department will take over the collection.
The Revenue Department is amending the Revenue Code to accommodate this change.
The cabinet on June 4 approved in principle a plan proposed by the Finance Ministry to collect VAT on imported goods valued at more than one baht.
The measure aims to prevent an influx of cheap imported goods, particularly from China, from flooding the domestic market.
Under the current VAT regime, in effect since 2018, only imported goods valued at more than 1,500 baht are subject to VAT collection.
This initiative is part of the government's effort to create a level playing field for importers and local producers. The move was in response to complaints from local businesses, which reported the influx of cheap products sold online is negatively affecting their income.