Most entrepreneurs want the government to raise tariffs on products imported to Thailand if it continues with its tax reform plan, according to the latest poll conducted by the Federation of Thai Industries (FTI).
The poll follows tax reform ideas unveiled by Finance Minister Pichai Chunhavajira late last year as he proposed ways to increase state revenue, support national development, enhance competitiveness and reduce domestic disparities.
The proposed reforms include increasing the value-added tax (VAT) rate, which has remained at 7% since 1992, to 15%, while reducing the corporate income tax rate to remain globally competitive and aligning with the guidelines of the Organisation for Economic Co-operation and Development (OECD).
The OECD recommends a 15% corporate income tax rate for all businesses. Thailand's current corporate income tax rate is 20%.
Roughly 48.8% of 125 FTI executives and entrepreneurs in the survey preferred adjusting the levy on imports, said ML Peekthong Thongyai, vice-chairman of the FTI.
Changing the corporate income tax rate finished second with 44.8% in favour, followed by improving land and building taxes (38.4%) and a VAT hike (32.8%).
The respondents believe tariff adjustment is important for Thailand to maintain local manufacturers' competitiveness and prepare the country for the direct and indirect impact of a trade war, which is expected to intensify this year, said ML Peekthong.
US President Donald Trump has already announced an additional 10% tariff on Chinese goods exported to the US, a move that drew countermeasures from Beijing.
The Joint Standing Committee on Commerce, Industry and Banking recently indicated its concern over the US-China trade war. The conflict threatens to worsen the influx of low-cost Chinese products into the Thai market, which already affects 23 industrial sectors.
Some 62.4% of respondents opposed raising the VAT rate.
Hiking VAT could drive up production costs along the supply chain, Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry, said earlier.
For example, he said fish can production requires businesses to have tinplate to make cans, lacquer for a protective coating, and boxes and other materials for labelling and packaging.
The prices of these materials will inevitably increase with a higher VAT rate, said Mr Tanit.