Finance mulls 5 percent VAT refund for shoppers as Chinese New Year’s gift
The Finance Ministry plans to introduce 5 percent value-added tax (VAT) refund as a Chinese New Year’s gift to shoppers who spend up to 20,000 baht during February 1-15 festive season with their debit cards that are linked to PromptPay system in order to boost domestic spending.
Finance Minister Apisak Tantivorawong said Friday that the proposed VAT refund was meant for spending on all kinds of products, except for liquor, beer, cigarettes or other “vice” products, and shoppers would be eligible to a maximum tax refund of 1,000 baht for spending not exceeding 20,000 baht.
The current VAT rate for goods and services is 7 percent.
He said that the tax break will be similar to “Helping the Nation” shopping measure which was earlier introduced by the Finance Ministry, but would cover more people who will benefit, including those who have not submitted their personal income tax forms.
The minister said that this latest tax break programme would cost the government between 5-6 billion baht in tax loss.
He explained that since shoppers would be required to use their debit cards which are linked to PromptPay to pay for the goods they buy information about their spending would appear on the database of the Revenue Department.
Currently, many people are holding debit cards and there are about 49 million PromptPay accounts, said the minister, adding that he would like commercial banks and the Revenue Department to consider waiving fees for people who want to apply for debit cards.
The minister, however, maintained that this latest short-term VAT refund was not intended to stimulate the economy, but was part of the Finance Ministry’s plan to develop the payment system.
He noted that the introduction of tax break at this juncture might prompt critics to accuse the government of making yet another attempt to woo voters which is not the case as this plan was mulled for quite some time not just an instant measure.
Earlier, the government has doled out several measures which were criticized as being populist gimmicks to woo voters. These include cash handouts for 14.5 million welfare card holders: 500-baht one-time giveaway to buy goods; 230 baht electricity bill and 100 baht water fee for each household per month; and one-time 1,000 baht travelling expense for the elderly to see doctors and tax break for the 15,000 baht purchase of car tyres, books or OTOP products.