Thailand's Fiscal Deficit Narrows Faster Than Expected; Tax on Departing Travelers Delayed to Support Tourism

Key summary

Dr. Eknoni Nititundapraphasri, Deputy Prime Minister and Finance Minister, stated that Thailand's fiscal position has improved, with the deficit for the fiscal year ending September 30, 2026, dropping from 4.4% of GDP to 3.4%. Revenue collection for the fiscal year exceeded estimates, particularly value-added tax (VAT). The government plans to review its medium-term fiscal plan by the end of 2026, aiming to reduce the deficit to no more than 3% of GDP by 2072. Dr. Eknoni decided not to implement a tax on travelers departing the country immediately to avoid negatively impacting the tourism sector, citing concerns that taxing both inbound and outbound travel would harm airlines. The Ministry of Finance will propose reducing excise taxes on E20 (ethanol-blended fuel) and B20 (palm oil-blended fuel) to support farmers producing sugarcane, cassava, and palm oil. At the upcoming Cabinet meeting on October 26, the ministry will present a energy transition project with a borrowing limit of no more than 100 billion baht. This includes supporting rooftop solar installations for one million households at 50,000 baht per household (approximately 50 billion baht) and investing up to 50 billion baht in infrastructure such as smart grids and smart meters to enable households to sell electricity back to the grid.