Finance Ministry highlights 10 tax reforms

Effort to add B435bn in annual revenue

The Finance Ministry has proposed a package of 10 tax reforms that are expected to generate more than 435 billion baht in additional annual revenue, with the objective of ensuring that government revenue remains sufficient to accommodate increasing public expenditure in the future.

According to the ministry's latest fiscal risk report, if no action is taken to increase government revenue, the ratio of government revenue to GDP could fall below the current level of 15% of GDP, said a ministry source who requested anonymity.

To improve the government's revenue collection capacity over the medium term, the ministry developed a tax structure reform and revenue collection efficiency enhancement plan.

Among the 10 measures, those already implemented in 2026 include the removal of the import duty exemption for low-value goods (the de minimis threshold of 1,500 baht), which is expected to generate an additional 3 billion baht in revenue, and the revision of the automobile excise tax structure based on CO₂ emissions, which is also expected to generate 3 billion baht.

Measures scheduled for implementation in 2027 include the introduction of the top-up tax, which is expected to generate 8.4 billion baht, and the imposition of a 1,000-baht outbound travel tax on Thai nationals travelling abroad, which is expected to generate 12 billion baht.

Other measures include a revision of the personal income tax structure and a review of selected tax deductions and allowances, expected to generate 50 billion baht; a change of the excise tax structure and an increase in excise tax rates on "sin products" (alcoholic beverages and tobacco), expected to generate 5 billion baht; and a gradual revision of the tax structure applicable to environmentally polluting products, including the introduction of carbon taxes, expected to generate 6-34 billion baht.

Measures to be introduced in 2028 include a value-added tax (VAT) hike from 7% to 8.5%, which is expected to generate 115 billion baht, and a revision of the tax structure for luxury goods, which is expected to generate 3 billion baht.

A further 1.5-percentage-point hike in the VAT rate to 10% is slated for 2030, which is the maximum rate permitted by law. This measure is expected to generate an additional 230 billion baht in revenue.

The 10 combined measures are projected to increase government revenue by 435 billion baht per year, the source said.

The revenue projections under the medium-term fiscal framework 2027-30 included the expected effects of these tax measures, resulting in the government revenue to GDP ratio rising modestly to 15.2% from 15.0% in fiscal 2025.

Over the longer term, the government will still need to consider additional measures to strengthen its revenue collection capacity so that it reaches a level comparable with international standards, noted the source.