PRACHIN BURI - Prime Minister Prayut Chan-o-cha has asked Thais to sacrifice by paying 1% more in value-added tax (VAT) to reap 100 billion baht for the state coffers.
The prime minister made the plea Thursday before a gathering of residents who welcomed him at Prachin Ratsadornamrung School in this province east of Bangkok.
He pointed to what he insisted is the "need" to raise VAT from 7%, though the finance minister assured locals a VAT rise would not come while this government is in office.
Gen Prayut argued the VAT rate has been kept at 7% for many years and only a 1% increase could generate more than 100 billion baht in additional tax revenues.
"Let me ask for this sacrifice. Can I? If this can happen, the state budget will increase and it can then be used to fund what members of the public are calling for," he said.
"The prices of [consumer] products should never be marked up too much [as a result of the VAT hike]. And I insist the government isn't broke ... the volume of loans sought are within the limit and public debts have even decreased," he said.
"People must learn to sacrifice", said chief government spokesman Lt Gen Sansern Kaewkamnerd. He warned the media against juxtaposing the prime minister's request for 100 billion baht via VAT with any suggestion the nation is broke.
The prime minister said he will press ahead with investment projects expected to yield good returns and lead to better revenue from next year onward, including high-speed train projects and double-track rail projects.
The prime minister, however, admitted the government might not be able to speed up the implementation of several of its projects due to some legal limits.
And despite reiterating the government was not running out of money and attempting to find more by forcing taxpayers to pay more, Gen Prayut said higher expenditure on various items loom.
If income does not increase to compensate, the country will go bankrupt. The taxation system was in critical need of an overhaul, he said.
Finance Minister Apisak Tantivorawong said the government plans to keep VAT unchanged at 7% for another year when the previous extension of the last period for keeping VAT at 7% ends on Sept 30.
VAT would not increase during the term of this government, he added.