Krungthai COMPASS: Import Duty May Fail to Curb Chinese Goods

Prachachat•Economy•1d ago

Reader Briefing

Krungthai COMPASS evaluates that imposing import duties and 7% VAT on all imported goods starting January 1, 2026 may not significantly slow the influx of cheap Chinese products.

•The Customs Department expects imports of goods valued under 1,500 Baht to reach 250 million pieces in 2026.
•The Thai government will collect import duties and 7% VAT on imported goods starting from 1 Baht from January 1, 2026.
•Approximately 80% of low-value imported goods originate from China.
•Krungthai COMPASS suggests an ecosystem-wide collaboration to support Thai entrepreneurs.

Overview

•The Customs Department expects 250 million pieces of goods valued under 1,500 Baht to be imported in 2026, a 5.4-fold increase compared to 2021, totaling over 45 billion Baht.
•Around 80% of these low-value imports come from China.
•The Thai government will start collecting import duties and 7% VAT on imported goods starting from 1 Baht on January 1, 2026.
•Krungthai COMPASS estimates that if 70% of the tax burden is passed to import prices, the measure could reduce low-value imports by about 3.3 billion Baht per year, or 7% from normal levels.
•Under full compliance, the Thai government is expected to see import duty revenue increase by approximately 8.2 billion Baht in 2026.
•Krungthai COMPASS evaluates that these measures may not significantly slow low-value imports, especially Chinese fashion goods, which remain 44%-85% cheaper than Thai goods after taxes.
•Krungthai COMPASS suggests entrepreneurs focus on quality competition, the Thai government prevent unfair trade and promote Thai entrepreneur capabilities, and the banking sector support sustainable business adjustment under the Reinvent Thailand guideline.

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Key Entities

Organization

Krungthai COMPASS

A research center of Krungthai Bank that analyzes import measures and provides economic recommendations.

Krungthai Bank(ธนาคารกรุงไทย)ℹ️

The parent bank of the Krungthai COMPASS research center.

Customs Department(กรมศุลกากร)

The government agency that expects a high volume of low-value imports in 2026.

Place

China(จีน)ℹ️

The source of approximately 80% of low-value imported goods into Thailand.

Policy

Reinvent Thailand

The guideline under which the banking sector supports sustainable business adjustment.