The cabinet on Tuesday (Aug 15) agreed to retain the value-added-tax (VAT) at the rate of 7% for another year from Oct 1, 2017 to Sept 30, 2018, Finance Minister Apisak Tantivorawong said.

Mr Apisak said the decision to retain the VAT at 7% is intended to shore up the people's cost of living and to build public confidence in the Thai economic growth.

If the VAT is increased at this time the country's consumption and economic growth may be affected, he added.

The VAT was introduced in Thailand in 1992 at a rate of 10% but was immediately slashed to 7% after business operators said the high rate cut into purchasing power. This rate has been retained since.

Finance Ministry sources said the government does not have a problem about the revenue and is of the opinion that a VAT increase during this time is not necessary. Moreover, the country's public debt is still low at 42% of the gross domestic product (GDP) � well below the 60% ceiling.

There are still ways of obtaining loans for investments in the country's infrastructure projects to spur the economy.

Source: Thai Public Broadcasting Service (Thai PBS)

By tladmin