Transcript of the above video:

As the title of this video suggests, we are discussing VAT, that is Value Added Tax and the possibility of an increase here in Thailand. I thought about making this video after reading a recent article from the Bangkok Post, that's bangkokpost.com, the article is titled: Ministry sets targets for tax reform. Quoting directly, and again this is one excerpt from a larger article, I urge those who are watching this video go check out that article in detail but under the subheading: VAT increase proposed, quoting directly: "Major political parties have proposed populist measures to lure voters in the general election ranging from reducing the personal income tax to suspending debt for a certain period, raising concerns these moves could affect the country's fiscal status. Whenever concerns about fiscal status are raised, a proposal to raise VAT from 7% to 10% to increase revenue is brought up by parties. However, no government has made the move because of the likely effect on voters." 

Yeah voters don't like an increase in taxes. I am not a huge fan of VAT in general just from the standpoint that value added tax, taxes the exact thing you really want to encourage in an economy, that's value addition. You want your economy to be a hyper value added economy; you want that economy to be just a machine for adding value. Let me be clear, Thailand meets a lot of those criteria. Thailand is an economy that adds a lot of value in many, many ways be it automotive, shipping, logistics communication. Thailand has got a robust economy and it adds a lot of value. Customer service, hospitality adds a lot of value in this economy. That said, increasing the VAT in my opinion, well 1) I don't want to see it increase because nobody likes, few people that are in business or entrepreneurial by nature really like to see an increase in taxes because increasing taxes doesn't really do a lot of good for the vibrancy if you will and the innovativeness of the economy. 

So the thing to take away from this video and to understand is this comes up a lot. I have done videos before where I have said possible VAT is in the horizon and I got burned a little bit in the comments because people said "oh he's kind of scaremongering, they do this all the time", and then they would end up not actually raising it and that's a fair point and in retrospect maybe I could have been a bit less hyperbolic about the notion of it actually raising but remember it is always a possibility out there that the taxes could be raised. For this reason it is in my opinion a good idea to keep a close eye on that issue because I don't think it is great for the economy to raise taxes. Quite honestly, I understand where the Revenue Department, where their mindset is probably at the moment coming off the last two and a half years where there was very little revenue and meanwhile Thailand had to go into a little bit further debt to maintain certain aspects of the Government and to sort of try to kind of buffer or mitigate the worst aspects of the economic downturn resulting from the lockdowns. I can understand where the Revenue Department is saying “hey we would like to thicken our revenue stream” as it were. 

That stated probably the best idea to do that is to just let business get on with doing business and tax them at the rates that already exist because if we can increase the volume of business being done in Thailand, rather than taking a bigger piece of the pie, we can just make the whole pie bigger and by doing that gain further tax revenues thereby. I think that's a far better plan than trying to take a bigger piece of an already fragile quite honestly, economic recovery here in Thailand. For future reference perhaps in the future, maybe it is not the best idea to shut down your economy for two and a half years. I am not just calling out Thailand for that because a ton of countries around the world did it. In my opinion it was very reactionary. Yes there was a threat out there; there was an issue that needed to be dealt with in terms of the pandemic and in terms of a disease but perhaps in the future we will think twice before just taking the sort of "nuclear option" of shutting down all the economies because this is kind of what you get. In the aftermath of that, there is a ton less tax revenue. My opinion what we need to do is get the country back on her feet, get the economy back, I shouldn't say the country back on its feet, Thailand is well on its feet, there's no doubt about that, but let's keep the economy moving forward; let's do business and make some money rather than worrying about how much more taxes can be accrued from people that already have had and will continue probably to have into the foreseeable future, a tough time moving things along coming off the last three years.