BANGKOK: Thailand expects a new tax break on consumption could create extra cash flow of 70 billion baht ($2 billion) in the economy that would support government efforts to boost activity, a deputy finance minister said on Friday.

The government plans a tax deduction of up to 50,000 baht ($1,450) based on proven spending, which will include domestic travel, Julapun Amornvivat told reporters.

“The tax deduction makes it easier for people to decide to buy things. It is a process to stimulate the economy,” he said. Southeast Asia’s second-largest economy is expected to grow 2.7% to 2.8% this year, he said.

Last year’s growth was 1.9%.

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“We hope the figure next year will be more than 3%,” Julapun said. The tax proposal will be submitted to cabinet next week before being introduced in the middle of January 2025, he said.

The plan is expected to cost the government about 10 billion baht in lost revenue, he added.