According to the Revenue Department, tax collection has been under expected levels by Bt1.02 billion for the first eight months of the year. Also, the government's budget deficit, at 2.5 per cent of GDP last year, will increase this year. Indirect taxes represent the greatest revenue collected, followed by corporate tax. As VAT collection increases, the government must try to increase the effectiveness and efficiency of collection to minimise any avoidance.
So, companies can benefit |from monitoring Thailand's |intention to introduce new indirect taxes and evaluate the impact |on their business that this exposure could cause. If a company's products or services are liable |for VAT, the product price and service fees are likely to increase, affecting customer demand and profit.
If, on the other hand, a company decides to absorb any VAT increase, it will also experience a profit reduction. A VAT increase would also lead to an increase in exposure to VAT liabilities.