Thailand to amend VAT laws for imported goods under 1,500 baht

A proposal to amend laws regarding the collection of Value Added Tax (VAT) on imported goods valued at less than 1,500 baht was announced today by Chulaphan Amornvivat, Deputy Minister of Finance. The proposed amendment, approved by Finance Minister Pichai Chunhavajira, aims to establish a fairer system for public and private sector importers, international manufacturers, and small and medium-sized enterprises (SMEs) in Thailand.

The Ministry of Finance plans to present this proposal to the Cabinet for consideration next week. Under the new system, the Customs Department will take on the responsibility of collecting VAT on imported goods valued below 1,500 baht. This process will mirror the current method used for goods that exceed 1,500 baht in value, where the collected VAT is transferred to the Revenue Department.

Deputy Minister Chulaphan highlighted the importance of creating a level playing field through this proposed amendment.

“This bill ensures that all stakeholders, including international manufacturers and SMEs, are subject to the same VAT collection standards, promoting fairness in the market.”

The Ministry of Finance also plans to explore amendments to the Revenue Code. Part of this exploration involves engaging with online platform operators to streamline the direct collection and remittance of VAT to the Revenue Department. This move is seen as an effort to modernise the tax collection process in line with the growing trend of e-commerce.

The proposed changes come as a response to the increasing volume of low-value goods imported through online platforms. These goods often escape VAT collection, creating an uneven competitive environment for domestic businesses. The new system seeks to address this issue by ensuring that all imported goods, regardless of their value, contribute fairly to the national revenue.

Operational procedures

The Customs Department’s involvement in VAT collection for lower-value goods will require adjustments in their operational procedures. However, officials believe that these changes will be beneficial in the long run, a Customs Department representative stated.

“Adapting our processes to accommodate this new responsibility will be challenging, but it is a necessary step to ensure fairness and efficiency in our tax system.”

In discussions with online platform operators, the Ministry of Finance intends to develop a seamless process for VAT collection. These discussions are expected to cover the technical and logistical aspects of implementing the new system. The goal is to minimise disruption for both consumers and businesses while maximising compliance and revenue collection.

The proposed VAT collection amendment is part of a broader effort by the Thai government to enhance the country’s tax system. By addressing gaps in VAT collection from imported goods, the government aims to boost national revenue and support economic growth. This initiative aligns with global trends where many countries are reevaluating their tax policies in response to the digital economy’s expansion.

If approved by the Cabinet, the new VAT collection rules could come into effect later this year. The Ministry of Finance is preparing for a smooth transition, with plans to provide clear guidelines and support to all affected parties. The success of this initiative will depend on effective communication and cooperation between the government, businesses, and consumers.

The Finance Ministry’s proactive approach to revising tax laws demonstrates its commitment to creating a more equitable and efficient tax system in Thailand. By ensuring that all imported goods are subject to VAT, the government hopes to foster a fair competitive environment and secure additional revenue for public services and infrastructure development, reported Pattaya News.