Cabinet approves 1 year extension of 7% VAT rate until 30 September 2027

Cabinet approves 1 year extension of 7% VAT rate until 30 September 2027

On 27 July 2026 the Thai cabinet approved in principle a draft royal decree to be issued under the Revenue Code to extend Thailand’s 7% VAT rate for another year to September 30, 2027, for the sale of goods, the provision of services and imports.

The new royal decree is required because the 7% VAT rate is set to expire on 30 September 2026 .

The Ministry of Finance considers it necessary to keep the VAT rate at 7% to support economic stability, encourage domestic consumption, and help Thailand’s economy grow in line with current forecasts. Full-year growth for 2026 is currently projected at 1.5–2.5%.

The Office of the National Economic and Social Development Council reported that supporting factors for economic growth include:

• Growth in private consumption and private investment.
• Increased government expenditure under the FY2026 budget.
• Continued export growth driven by demand for advanced technology products.

However, significant risks remain, including:

• Prolonged geopolitical conflicts in the Middle East, affecting energy costs and international shipping routes.
• Slowing global economic and trade growth.
• Volatility in financial and capital markets.
• High household debt burdens.
• Deteriorating credit quality among SMEs.
• Climate-related impacts on agriculture.
• Uncertainty surrounding United States trade protection measures.