Thailand downturn threatens tax audits and VAT rise
As Thailand enters recession, the falling tax receipts mean that the VAT office is looking to increasing the numbers of VAT inspections and potentially raising the VAT rate.
There has been a sharp fall in the receipts from import VAT, which is the biggest source of the consumption tax take. This is likely to lead to the revenue authorities increasing the number of Thai VAT audits and inspections in the hope of identifying areas of non-compliance and therefore the opportunity to charge penalties and interest.
Thai VAT rate competes with Singapore
Also, the current 7% Thai VAT rate may have to be raised if the shortfall persists to the end of the year. Aside from the political unpopularity of such a move, it would also place Thailand in an uncompetitive position towards Singapore’s 7% GST rate.
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