The government looks set to impose a 7% value-added tax (VAT) on imported goods valued from one baht up, starting in May.

Goods sold for less than 1,500 baht per parcel and imported to Thailand are currently exempt from VAT.

Deputy Finance Minister Julapun Amornvivat said the Finance Ministry and the Revenue Department are finalising the legislation.

Legislation on VAT collection is expected to be completed by May, said Mr Julapun.

"VAT collection is to ensure fairness for small businesses in Thailand, as both foreign and domestic operators will have to pay taxes at the same rate," he said.

The Thai e-Commerce Association said the new measure should improve the competitiveness of local small and medium-sized enterprises (SMEs).

An influx of low-priced Chinese goods have flooded into Thailand, with warehouses in the country allowing quick delivery to local consumers and VAT exemption.

The Chinese products are sold on e-commerce platforms such as Lazada and Shopee as well as social commerce channel TikTok Shop.

The majority of popular products priced below 1,500 baht are mobile accessories, gadgets, power banks, clothes and utility products.

Collection of VAT on these goods should reduce the trade deficit with China, which is 1 trillion baht per year.