29-4-2024 (BANGKOK) In a bid to promote fair trade practices and level the playing field for domestic producers, the Thai Customs Department is set to implement a sweeping change in its tax collection policies for imported goods sent through postal services. Starting in May, a value-added tax (VAT) will be imposed on all such goods, regardless of their declared value.

The announcement was made by Lavaron Sangsnit, the permanent secretary of the Finance Ministry, who shed light on the current exemption that allows importers to bypass import duties and VAT if the cost, insurance, and freight (CIF) value of each item is declared at less than 1,500 baht (approximately $45).

However, this exemption has been exploited by an influx of low-priced goods from China, which has created an unfair advantage over domestic producers who are subject to taxation. To address this imbalance and ensure fair competition, the Finance Ministry has decided to collect VAT on all imported goods sent via postal services, irrespective of their declared value, while maintaining the exemption from import duties.

Lavaron Sangsnit explained that the Customs Department will issue an announcement regarding this new tax collection policy, a process that can be implemented more swiftly than amending the Revenue Code.

A source from the Finance Ministry, who requested anonymity, revealed that the threshold for exempted goods must not include prohibited items, as each country sets its own threshold based on economic conditions. In Thailand, the threshold was previously set at 1,000 baht but was adjusted to 1,500 baht per item in 2018.

The sheer volume of parcel imports into Thailand poses a significant challenge, with over 30 million parcels entering the country annually. More than half of these imports claim to be items with a CIF value not exceeding the 1,500 baht threshold.

Compounding the issue is the practice of online platforms selling goods from China, which import large quantities of low-priced items in container loads, each containing tens of thousands of individual items. This presents a daunting task for customs officials if each box needs to be opened and assessed for taxation, as proposed by the Finance Ministry.

As a result, the Customs Department is currently exploring appropriate methods for tax collection on these low-priced goods, ensuring a balanced approach that promotes fair competition while streamlining the import process.

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