5% VAT refund planned for Chinese New Year

Economy November 30, 2018 16:21

By The Nation

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THE Finance Ministry plans to introduce a 5 per cent value-added tax (VAT ) refund for all shoppers during the Chinese New Year, Finance Minister Apisak Tantivorawong said on Friday.



“We want to shore up consumption and promote the e-payment system,” said Apisak.

The government will give shoppers a 5 per cent VAT refund when they purchase goods from February 1 to 15. The current VAT rate is 7 per cent.

To take advantage of the tax break, shoppers have to use debit cards when buying items and the tax refund will be sent back to them via their “PromtPay” accounts, he said.

“Initially the ministry projects the latest scheme would cost about Bt6 to Bt7 billion, but we will set aside a budget of Bt10 billion,” he said.

Shop owners have to have an electronic data capture (EDC) machine to read the debit cards.

“We are trying to maintain a economic growth rate in a range of 4-5 per cent, by continuing to inject money into the system if indicators suggests growth would sharply fall,” he responded to criticism that the refund plan was a political strategy in the run-up to the general election on February 24.

Consumption growth currently is slightly above 4 per cent and is quite positive for the economy, he added.

The government also wants to promote the e-payment system as well as encouraging everyone into the tax system, he said.

The maximum purchasing amount to be eligible for a VAT refund is Bt20,000 per shopper and there will be a maximum refund worth Bt1,000.

All goods are covered except alcoholic drinks.

Apisak did not reveal when this latest package would be submitted to the Cabinet for approval saying that it is in a study process.

Apisak also intends to submit to Cabinet a tax allowance for shopping between December 15 to January 15. The eligible tax allowance purchasing amount is capped at Bt15,000 for each shopper. The allowance covers tyres, OTOP and books.