VAT on all imports over 1 baht gets Cabinet approval
A proposal by the Ministry of Finance to impose value-added tax (VAT) on all imported goods valued at over 1 baht has received approval in principle from the Cabinet.
This measure aims to curb the influx of inexpensive imported goods, particularly from China, that are saturating the domestic market.
Government spokesperson Chai Wacharonke announced that the new threshold will be implemented 15 days after its publication in the Royal Gazette and will remain in effect until December 31. The government will evaluate the policy’s impact before deciding whether to extend it further.
Currently, VAT is only collected on imported goods valued at over 1,500 baht, a regime that has been in place since 2018. The new measure is intended to create a more equitable market environment for local producers and importers.
Chai noted that this initiative is part of the government’s broader effort to provide a level playing field for local businesses.
He noted that local businesses, particularly online sellers, have been adversely affected by the influx of low-cost products, which has undercut their earnings.
In response to these concerns, the government will also consider amending the Revenue Code to provide a long-term solution to the issue.
The group Chief Executive of aCommerce, a prominent e-commerce facilitator, Paul Srivorakul highlighted that VAT collection ensures uniform tax standards for all goods, irrespective of their origin.
This equalises the competition landscape for local products and domestic enterprises, potentially boosting government revenue through both import duties and VAT.
Nevertheless, he noted that implementing new duties on lower-value goods might complicate customs procedures, potentially slowing down the import process and affecting businesses reliant on imported products.
The e-commerce sector, particularly marketplaces profiting significantly from the sale of low-cost imported goods, could experience repercussions from VAT collection on inexpensive imports.
Despite this, Paul considers the advantages for local SMEs and the Thai economy to outweigh the impact on Chinese e-commerce platforms.
Numerous industries, notably the steel sector, are experiencing the impact of Chinese goods flooding the market. Rather than importing steel from China to sell in Thailand, Chinese entrepreneurs are opting to establish steel production plants within Thailand.
An independent analyst on international trade, Aat Pisanwanich expressed that without implementing further measures to support Thai entrepreneurs, it is feared that within five years, Thai entrepreneurs will cease to exist altogether, reported Bangkok Post.
