Thailand Collects Over 4 Billion Baht from First-Baht Import Tax as Shoppers Favor Local Goods

Thailand's Customs Department has collected over 4 billion baht in import tax and VAT since the implementation of the "first-baht" import tax policy on January 1, 2026. This policy requires taxes to be paid on foreign goods from the very first baht of their value. During the first 11 months of fiscal year 2026 (October 2025 to August 2026), imports subject to this measure were valued at approximately 41 billion baht, involving about 225 million items. Customs Department Director-General Phanthong Loykulnant stated that the increase in collections is partly due to higher prices for overseas products, which have encouraged consumers to purchase more goods produced and sold domestically. While imports of miscellaneous products from China remain relatively stable, consumers have reportedly reduced their orders. Authorities are also actively investigating products labeled "Made in Thailand" that may not genuinely be produced domestically. Phanthong highlighted that such misrepresentations of origin can negatively affect Thailand's exports and its trade relations, including concerns previously raised by the United States. Officials are examining businesses that might import goods under one tariff classification and re-export them under the same classification, suggesting minimal or no processing within Thailand. The Customs Department is collaborating with the Department of Foreign Trade to scrutinize relevant manufacturing licenses and other pertinent information. Phanthong cited instances where factories appeared sufficiently large for production, but their machinery was reportedly covered and unused. While acknowledging these cases represent a small fraction of overall exports, he emphasized the necessity of thorough investigation. Furthermore, limitations in Thailand's industrial production data were noted, with newer industries potentially not yet fully reflected in the Manufacturing Production Index (MPI), which could lead to discrepancies between reported industrial activity and export figures. Overall revenue collected by the Customs Department on behalf of other government agencies reached 590.8 billion baht in the first 11 months of fiscal year 2026, marking a 9% increase year-on-year. This figure encompasses taxes and fees collected for agencies such as excise tax, VAT, and local government-related taxes. The department anticipates exceeding 600 billion baht in total collections for the full fiscal year, surpassing the 596 billion baht recorded in fiscal year 2025. VAT collected by Customs on behalf of other agencies amounted to 383 billion baht during the first 11 months, an 11% rise year-on-year. Phanthong also pointed out that Customs' direct import duty revenue has been declining due to numerous free trade agreements (FTAs) Thailand has with various countries, allowing many imported goods to enter with little or no customs duty. Import duties are now primarily collected on goods from countries and regions without applicable FTAs, including the United States, parts of the Middle East, and some European nations. For every 100 baht of goods processed by Customs, only about 0.82 baht is collected as customs duty. However, the department's role in collecting taxes on behalf of other government agencies generates substantially more revenue.