Senate Proposes VAT Hike to Offset Revenue Gap
Thailand's Senate urged the Finance Ministry to raise the value‑added tax to offset a 760‑billion‑baht revenue shortfall, arguing that low‑income earners would be compensated through refunds. Senators also called for better use of off‑budget funds and improved management of state assets to boost income and reduce borrowing. The proposal came during the October 6, 2026, Senate review of the FY2025 financial report.
The Senate debate featured Senator Nirut Yuphakdee, who noted that liabilities exceed revenue but argued the situation is not as dire as perceived, pointing to assets within the liability figure. He highlighted four agencies of concern: the Comptroller General's Department holds about 4 trillion baht in off‑budget funds that earn minimal returns, while local government deposits yield less than 0.5% interest compared to an average interest expense of 2.75%. A 2% spread on 4 trillion baht could generate 80 billion baht, which the Comptroller General and Public Debt Management Office should use instead of paying high interest. He suggested allocating 4.4 trillion baht as a 1 trillion baht reserve, with the remaining 3 trillion eliminating the need for further borrowing. Senator Nirut also urged the Treasury Department to manage its 10 million rai of assets valued at 5 trillion baht like private sector holdings, which could yield an additional 1 trillion baht at a 20% return, and called for better management of the State Enterprises Administration Office's 1.7 trillion baht investments to secure at least a 5% return. Regarding revenue policy, he asked the Comptroller General to consider raising VAT: each 1% increase would add 1.5 trillion baht in revenue, and a lawful 3% increase would bring back 450 billion baht. He acknowledged the burden on low‑income earners but noted that those earning 100,000 baht or less would pay only 3,000 baht extra per year, or 250 baht per month, and that with a 50% refund to the 10 million registered poor, they could receive up to 10,000 baht back, resulting in a monthly gain of nearly 1,000 baht, thus alleviating hardship.
