In a decisive move to strengthen the nation’s fiscal foundation, the Thai government is preparing a sweeping reform of the Revenue Code in 2025. Spearheaded by the Ministry of Finance, this strategic initiative aims not only to modernise the nation’s tax infrastructure and close fiscal gaps, but also to bolster Thailand’s competitiveness on the global stage by fostering a more transparent, resilient and investor-friendly economic environment.
At the heart of the reform is an ambitious target: increasing the government’s tax revenue from the current 12%–13% of GDP to 18%. This 5% uplift could translate into an additional THB 800 billion annually, providing the government with the financial capacity to balance the national budget, something Thailand has not achieved in over two decades.
The reform will span the three major tax-collecting bodies: the Revenue Department, the Excise Department and the Customs Department. Each will undergo structural and procedural changes to improve efficiency, close loopholes and expand the tax base. The focus areas include:
While the revenue outlook is improving, the path to reform is not without challenges. Tax avoidance, especially among small businesses and digital platforms, remains a concern. The government is expected to introduce stricter compliance measures and possibly revise VAT thresholds to address these gaps.
The reform plan is being finalised and will be submitted to the Deputy Prime Minister and Finance Minister within the 2025 fiscal year. Its success will depend on effective implementation, public cooperation and the ability to adapt to evolving economic conditions.
Thailand’s Revenue Code revamp is more than a fiscal adjustment—it is a strategic pivot toward long-term economic resilience. By modernizing the tax system and boosting revenue efficiency, the government is laying the groundwork for a more balanced, equitable, and sustainable financial
future.
Melea Cruz
BDO in Thailand
At the heart of the reform is an ambitious target: increasing the government’s tax revenue from the current 12%–13% of GDP to 18%. This 5% uplift could translate into an additional THB 800 billion annually, providing the government with the financial capacity to balance the national budget, something Thailand has not achieved in over two decades.
Comprehensive Reform Across Key Tax Agencies
The reform will span the three major tax-collecting bodies: the Revenue Department, the Excise Department and the Customs Department. Each will undergo structural and procedural changes to improve efficiency, close loopholes and expand the tax base. The focus areas include:
- Income tax: Revisions to both corporate and personal tax are expected to promote fairness and expand the tax base. Potential changes may include a reduction in the tax rates aimed at enhancing competitiveness while ensuring equity.
- VAT: The current reduced VAT rate of 7% is expected to be increased, potentially reaching the statutory rate of 10%.
- Excise tax: Revisions to better reflect environmental and social policy goals.
- Customs duties: Streamline processes to align with international trade standards and reduce tax evasion.
Revenue Trends and Economic Context
The first half of fiscal year 2025 has already shown promising signs. The Ministry of Finance reported revenue collection of THB 1.19 trillion, exceeding targets by 0.2% and marking a 2.3% increase over the previous year. This growth was largely driven by domestic consumption, particularly through VAT, and contributions from state enterprises. However, not all sectors performed equally. Excise tax collections—particularly from the automotive sector—fell short due to government incentives promoting electric vehicles, highlighting the delicate balance between policy-driven economic transformation and revenue generation.
Challenges and Strategy Forward
While the revenue outlook is improving, the path to reform is not without challenges. Tax avoidance, especially among small businesses and digital platforms, remains a concern. The government is expected to introduce stricter compliance measures and possibly revise VAT thresholds to address these gaps.The reform plan is being finalised and will be submitted to the Deputy Prime Minister and Finance Minister within the 2025 fiscal year. Its success will depend on effective implementation, public cooperation and the ability to adapt to evolving economic conditions.
Thailand’s Revenue Code revamp is more than a fiscal adjustment—it is a strategic pivot toward long-term economic resilience. By modernizing the tax system and boosting revenue efficiency, the government is laying the groundwork for a more balanced, equitable, and sustainable financial
future.
Melea Cruz
BDO in Thailand