BANGKOK — Thailand’s caretaker Cabinet has approved a one-year extension of the 7% value-added tax (VAT) rate, postponing a scheduled increase to 10% that was set to take effect on October 1. The decision, announced by caretaker Deputy Finance Minister Julapun Amornvivat on Wednesday, aims to alleviate financial pressure on households and stabilize consumer spending amid ongoing economic challenges.

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The extension will run from October 1, 2024, to September 30, 2026, ensuring continuity of the reduced rate while the incoming government led by Prime Minister Anutin Charnvirakul formulates long-term fiscal policies. Julapun emphasized the urgency of the move, noting that delays could have triggered an automatic VAT hike under existing legislation.

Economists widely support the extension, citing its role in mitigating the cost of living crisis and sustaining economic recovery efforts. The caretaker government’s intervention reflects concerns over sluggish growth and household debt burdens, though Julapun declined to address related issues such as currency appreciation, stating these would be handled by the new administration.

Thailand’s caretaker cabinet has extended the 7% VAT rate until September 2026, rejecting a proposed hike to 10%. The move aims to support domestic consumption and economic recovery. Officials argue that maintaining the current rate is more beneficial than increasing revenue… pic.twitter.com/6wjP6aSjRB

— Bangkok Post (@BangkokPostNews) September 10, 2025

In a separate review, the caretaker Cabinet acknowledged the positive impact of the 10,000-baht digital wallet handout project on economic stimulation and financial discipline. The VAT extension and stimulus measures underscore the government’s focus on short-term relief while awaiting broader policy directives from Anutin’s coalition.

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The move avoids placing additional strain on consumers and businesses during a period of global uncertainty, though structural fiscal reforms remain pending under the new leadership.

-Thailand News (TN)