Cabinet keeps VAT at 7% for another year

The Cabinet today decided to retain the 7% value-added tax (VAT) rate for another year, until September 30, 2027.

Government spokesperson Rachada Dhnadirek said maintaining the 7% VAT rate will help ease the cost-of-living burden, stimulate domestic consumption and stabilise the economy.

She also said the measure will boost private-sector confidence in the Thai economy, encourage greater domestic investment and further support economic growth.

The Cabinet also agreed to exempt military officers who join the early retirement programme in the 2025, 2026 and 2027 fiscal years from paying personal income tax on their retirement benefits.

The tax exemption will apply to officers from the three armed forces who are over 50 years old, have served for at least 25 years and have at least two years remaining before reaching the mandatory retirement age.

The exemption covers the early retirement payment, equivalent to seven to 10 months of the officer's final salary, plus any position allowance.

Deputy government spokesperson Lalida Periswiwatana said the tax exemptions for the three fiscal years would reduce state revenue by about 40 million baht per fiscal year, or 120 million baht in total. However, she said the measure would help the government achieve its goal of downsizing the military.