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Deputy Prime Minister and Finance Minister Surapong Suebwonglee insisted on Monday that the Commerce Ministry's proposed cut in value-added tax from 7 per cent to 3 per cent is impossible in the current economic conditions.

He noted that the government has enforced several tax measures to stimulate the economy, and if VAT is reduced, it would deplete the government's revenue.

"VAT is a major source of revenue. For two years, we have delayed the increase in VAT to 10 per cent and instead focused on boosting the economy through higher tax deduction allowances, higher depreciation costs, and a cut in special business tax for the property sector. Inclusive of the six recently-endorsed measures, we have lost a large amount of revenue and there is no need to enact a tax measure to control product prices. Indeed, the lower fuel excise taxes should reduce costs and allow manufacturers to hold on the planned price increases," he said.

The Nation