Thailand To Impose VAT on All Postal Imports Starting May

The Customs Department is set to begin collecting value-added tax (VAT) on all imported goods sent through postal services starting in May, regardless of the item’s value.

Finance permanent secretary Lavaron Sangsnit stated that currently, imported goods mailed via postal services are not subject to import duties and VAT if the declared cost, insurance, and freight (CIF) value is below 1,500 baht each.

However, the influx of inexpensive goods from China is undermining the market, providing these imports with a competitive edge over locally taxed domestic products.

To promote equitable trade, the Finance Ministry intends to impose VAT on all postal imports without regard to their CIF value, though import duties will still be waived.

Mr. Lavaron announced that the Customs Department would make a formal declaration regarding this new VAT policy, which can be implemented more rapidly than changes to the Revenue Code.

A confidential source from the Finance Ministry mentioned that the exemption threshold must exclude any prohibited items.

Each country determines its own exemption thresholds based on its economic conditions.

In Thailand, this threshold was initially set at 1,000 baht, but was raised to 1,500 baht per item in 2018.

Annually, Thailand sees over 30 million imported parcels, with the majority claiming a CIF value of under 1,500 baht.

E-commerce platforms feature numerous low-cost goods from China, typically shipped in large containers containing thousands of items.

This situation presents a substantial challenge and could be time-consuming if officials must open each container to levy taxes, as the Finance Ministry suggests.

Customs officials are exploring effective tax collection methods for these low-priced imports.