Bangkok: The Cabinet has approved extending the 7% VAT rate for another year until September 30, 2027, to help stabilize the cost of living and maintain the stability of the Thai economy.

According to Thai News Agency, Ms. Ratchada Thanadirek, spokesperson for the Prime Minister's Office, revealed that the Cabinet meeting approved the principles of the draft Royal Decree issued under the Revenue Code concerning the reduction of the Value Added Tax (VAT) rate as proposed by the Ministry of Finance. This measure is intended to extend the VAT reduction measure for another year.

Ms. Rachada stated that the essence of the measure is to extend the reduced value-added tax (VAT) rate, which is set to expire on September 30, 2026, for another year, from October 1, 2026, to September 30, 2027. The VAT rate will temporarily remain at 6.3% (excluding local taxes) or 7% (including local taxes) for all sales of goods, services, and imports.

"Maintaining the value-added tax rate at 7 percent will help mitigate the impact of the rising cost of living, stimulate public consumption, which will boost business confidence in the Thai economy and allow domestic private investment to expand as targeted. It will also create a favorable business environment for the private sector," Ms. Rachada said.