Thailand’s Centre for Economic Situation Administration (Cesa), has recently approved a proposal to offer taxpayer income tax deductions of up to 30,000 baht for purchasing products and services with a 7 percent value-added tax (VAT), in another bid to help boost domestic spending and consumption.

As of 23 October until the end of 2020, the tax deduction offer will apply to the 2020 tax year and is projected to inject about 120 billion baht into the country’s economy, said Danucha Pichayanan, deputy secretary-general of the National Economic and Social Development Council.

About 4 million people are expected to take advantage of the programme, which, however, will cost the state about 12 billion baht in missing tax revenue, he said.

Overall, the tax deduction will cover almost every product and service. The few exceptions include alcoholic beverages, tobacco products, government lotteries, fuel, accommodation services, and air tickets, said Danucha.

Currently, only those that have yet to sign up for either of the two existing consumption boosting programs are eligible to apply for the new tax deduction programme.

The two programmes are the provision of 1,500 baht in living allowances to each holder of the state welfare card for spending in three months and the government’s offer to pay half the amount an individual spends on consumer products, for no more than 3,000 baht per person in three months.

The Cesa also approved adjustments to existing local tourism promotion and benefits being offered to healthcare workers.

Due to the relatively slow rate of economic recovery, both of these initiatives will be extended to 31 January, said Danucha.


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