Why Thai Restaurants Need A VAT Cut To Rebound

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Comprehensive Fiscal and Operational Support for the Thai Restaurant Sector

The Thai Restaurant Association is set to introduce a major six-part proposal to the new government, centered on reducing the value-added tax (VAT) on dining bills from 7 percent down to 5 percent to significantly aid the recovery of every Thai restaurant nationwide.

President Thaniwan Kulmongkol confirmed that this detailed six-part proposal was compiled following extensive consultations and input gathered from numerous stakeholders across the entire industry, aiming to provide solutions to persistent financial and operational challenges.

The association’s plan advocates for immediate financial relief, starting with a 12-month reduction in VAT.

Additionally, it proposes that the government facilitate a program for soft loans to be issued to restaurant operators, featuring highly favorable interest rates between 1 and 2 percent.

These crucial loans would be further guaranteed by the Thai Credit Guarantee Corporation, thereby making essential working capital more accessible and affordable for struggling small and medium enterprises.

The proposal also targets the high cost of operations.

It urges the government to implement a special, reduced electricity rate specifically for small and medium-sized Thai restaurant businesses to lower utility costs.

Furthermore, the association seeks to streamline the supply chain by reducing the number of middlemen involved in the sourcing of raw materials, which is expected to effectively bring down the cost of food ingredients.

These combined fiscal and operational measures are designed to ease financial pressure and ensure a more resilient economic environment for the local food service industry.

Enhancing Workforce Skills and Streamlining Bureaucratic Processes

To ensure the long-term competitiveness and quality of service, the Thai restaurant industry group is pushing for deep structural reforms, including massive investment in workforce training and the simplification of complex government licensing and regulatory hurdles.

A significant part of the association’s strategic plan focuses on upskilling and reskilling the industry’s workforce, preparing them for modern operational demands and international tourism.

These comprehensive training programs would cover essential areas such as improving language proficiency, which is vital for servicing a global clientele; rigorous food safety and hygiene standards; and necessary digital marketing skills, empowering individual Thai restaurant businesses to effectively navigate the digital economy.

Addressing critical labor shortages, the group will formally request the creation of a fast-track channel to expedite the recruitment and approval process for legal foreign workers, ensuring a steady and legal labor supply.

Furthermore, the association is calling for substantial bureaucratic reform to increase operational efficiency.

It has proposed drastically shortening the license application approval process, reducing the current timeline from several months to a matter of days.

In a push for better public health and urban planning, the plan advocates for a complete overhaul of city planning to ensure designated food zones and areas where street food vendors operate are safer and adhere to modern hygienic conditions.

In terms of digital support, the association has requested the release of more open data related to the tourism and food industries, which will serve as an invaluable resource for Thai restaurant operators when developing precise, data-driven marketing and strategic business plans.

Culinary Promotion and Elevating Thai Curry’s Global Profile

The industry is leveraging a national culinary competition, the “Khao Gaeng: Thai Curry Rice Championship 2025,” to actively promote the diversity and accessibility of authentic Thai cuisine, seeking to further cement the global appeal of the Thai restaurant experience.

In a concerted effort to promote the depth and value of local culinary traditions, the association and its partners are co-organizing the major national contest, “Khao Gaeng: Thai Curry Rice Championship 2025,” with the ultimate goal of identifying and celebrating the country’s best khao gaeng chef.

The khao gaeng or Thai curry rice dish was strategically chosen because, as Mrs. Thaniwan noted, its varied price range—from street stalls to formal dining settings— effectively helps foster the perception that authentic Thai cuisine is accessible and provides exceptional value across all consumer price points.

The competition will showcase the versatility of Thai curry, featuring five distinct, classic dishes: the vibrant green curry chicken, the flavorful tom kha gai (Thai chicken coconut soup), the rich panaeng curry beef, egg and pork in sweet brown sauce, and the distinctive Thai-style spicy shrimp paste.

The Tourism Authority of Thailand (TAT) is actively supporting this initiative.

Governor Thapanee Kiatphaibool stated that the agency aims to elevate Thai curry to a definitive “must-taste” dish that every foreigner should experience at least once.

She pointed out that many overseas Thai restaurant establishments already prominently feature Thai curry, serving as an effective initial point of contact that can successfully entice more international travelers to visit Thailand, where they can explore the rich spectrum of authentic and localized Thai food.

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