Thailand approves shopping tax break in bid lift spending, growth

Reuters Staff

 

BANGKOK (Reuters) - Thailand’s cabinet approved on Tuesday a tax incentive to spur shopping before the end of the year, a government official said, as the military government tries to boost Southeast Asia’s second-largest economy.

 

The government will allow Thais a tax deduction of up to 15,000 baht ($453) on certain goods and services they buy between Nov. 11 and Dec. 3, Nattaporn Jatusripitak, an adviser in the Prime Minister’s Office, told reporters.

 

Nattaporn said the incentive is expected to cost the government about 2 billion baht in revenue while spurring about 10 billion baht in spending.

Last year, the government offered a similar incentive for shoppers.

 

Private consumption accounts for half of Thailand’s economy but has been curbed by high household debt levels and low farm prices.

 

The finance ministry has forecast economic growth of 3.8 percent this year, up from 3.2 percent in 2016.

 

-- © Copyright Reuters 2017-11-7

Cabinet approves end-year tax break for shoppers

By The Nation

 

File photo

 

The Cabinet on Tuesday approved a 23-day tax break for consumers to boost shopping activities nationwide by an estimated Bt10 billion and stimulate the economy.

The Finance Ministry will lose about Bt2 billion in personal income tax collection as a result of the campaign, but the retail and other sectors will probably gain a combined Bt10 billion in sales during the promotion that will run from November 11 to December 3.

 

While many items are covered by the campaign, alcoholic beverages, tobacco, hotel rooms, airline tickets, cars, motorcycles, boats and fuel are not included.

 

Businesses have to issue value-added tax invoices for customers to claim the tax deduction.

 

Nuttaporn Jatusripitak, an adviser at the Prime Minister’s Office, said the campaign was aimed at people planning to buy goods and services worth up to Bt15,000 per person during the period as they would be entitled to personal income tax deductions based on the value of the items they bought.

 

The campaign is intended to spur domestic consumption ahead of the year-end festive season, while prompting more small and medium-sized businesses to register so that their customers are entitled to the tax break.

 

The short-term promotion is timed to avoid causing a negative impact on the festive season with the national economy projected to gain another 0.05 per cent this year.

 

Nuttaporn said tourism and related activities were not covered in the campaign as there would be a separate promotion at a later date. He added that the Revenue Department was working on a plan that would provide holidaymakers with tax incentives if they buy air tickets from airlines that pay VAT in Thailand.

 

Source: http://www.nationmultimedia.com/detail/politics/30331071

 

-- © Copyright The Nation 2017-11-07

While many items are covered by the campaign, alcoholic beverages, tobacco, hotel rooms, airline tickets, cars, motorcycles, boats and fuel are not included.

 

Can we know what is covered under this campaign ?

4 minutes ago, canopus1969 said:

While many items are covered by the campaign, alcoholic beverages, tobacco, hotel rooms, airline tickets, cars, motorcycles, boats and fuel are not included.

 

Can we know what is covered under this campaign ?

Does it really matter, its a tax break it will only apply to those of us that pay income tax. That is not a large group of people in Thailand. 

31 minutes ago, robblok said:

Does it really matter, its a tax break it will only apply to those of us that pay income tax. That is not a large group of people in Thailand. 

From how I read it I, I think it'll mean that people will not have to pay the 7% VAT that is applied to most purchases but it will not apply to the big money spinners like tobacco, booze etc. I'm not sure it's a income tax break for everyone. I may very well be wrong though. 

10 minutes ago, ZeVonderBearz said:

From how I read it I, I think it'll mean that people will not have to pay the 7% VAT that is applied to most purchases but it will not apply to the big money spinners like tobacco, booze etc. I'm not sure it's a income tax break for everyone. I may very well be wrong though. 

It's not about the 7% VAT, but we (if you work in Thailand and pay income tax) can deduct max 15k baht when filing our tax begin next year in case you buy something in that given period. 

1 hour ago, canopus1969 said:

While many items are covered by the campaign, alcoholic beverages, tobacco, hotel rooms, airline tickets, cars, motorcycles, boats and fuel are not included.

 

Can we know what is covered under this campaign ?

 They state what's not included, so everything else is included. As I remember from last year even things like car maintenance bills are included. 

29 minutes ago, Cheops said:

It's not about the 7% VAT, but we (if you work in Thailand and pay income tax) can deduct max 15k baht when filing our tax begin next year in case you buy something in that given period. 

Ah ok. So, it's just for those who are business owners etc and file they're own tax? 

Yep, just what the Thais need.  Another let's go on a shopping spree.  WIth household debt at its highest and still increasing the Thai Poobahs declare a period of tax incentives if you go out and get more in debt.  Remarkable that the Thai economy is still standing.

16 minutes ago, ZeVonderBearz said:

Ah ok. So, it's just for those who are business owners etc and file they're own tax? 

No also for salary workers that pay tax, but not a lot of people pay income tax. It would even apply to foreigners who pay income tax (if they work legally in Thailand) its just a deduction that you file with your income tax.

16 hours ago, snoop1130 said:

The finance ministry has forecast economic growth of 3.8 percent this year, up from 3.2 percent in 2016

Presumably the minister is talking about GDP growth. Despite his fanciful prediction the GDP growth figure is a nonsense as it is measured only by the "white" economy which is believed to be 59% of the total economy. It has been recorded that Thailand has one of the highest "black" economies in the world estimated to be running at about 41% of the total economy. 

So in theory the two economies combined should represent the true GDP growth/decline figure. Problem being that no one knows what the actual figure for the "black" economy is at any given time and whether it is growth or decline. If, hypothetically, the "black" economy is in serious decline (like it could well be) then the overall true GDP growth could be zero. Who knows? The Minister certainly wouldn't.

 

3 hours ago, robblok said:

Does it really matter, its a tax break it will only apply to those of us that pay income tax. That is not a large group of people in Thailand. 

Plus, the higher your income the more you save. So its mostly for rich people paying in the higher tax incoe brackets.

 

I always doubt if the positive effects are as high as mentioned. My wife was about to buy a new phone for months already but postponed it for this tax break. It might seem she spends because of the tax break but she would have spend it anyways.

2 hours ago, Cheops said:

 They state what's not included, so everything else is included. As I remember from last year even things like car maintenance bills are included. 

As long as it is from a "registered business". Last year we used it for a washer and dryer and the year before for a new phone. But you can also just use your Tesco receipts.

 

Just go to the service counter with your ID card and get a special invoice made.

4 hours ago, robblok said:

Does it really matter, its a tax break it will only apply to those of us that pay income tax. That is not a large group of people in Thailand. 

 

Unless I misread this it's not an income tax break or reduction. It's the waiver of VAT on certain goods and services purchased during the period of operation. 

Businesses have to issue the customer with a VAT invoice and the customer then has to claim the VAT back.

 

 

2 hours ago, Baerboxer said:

 

Unless I misread this it's not an income tax break or reduction. It's the waiver of VAT on certain goods and services purchased during the period of operation. 

Businesses have to issue the customer with a VAT invoice and the customer then has to claim the VAT back.

 

 

 Yes,  you misread this. It's about income tax deductions. 

3 hours ago, Bob12345 said:

Plus, the higher your income the more you save. So its mostly for rich people paying in the higher tax incoe brackets.

 

I always doubt if the positive effects are as high as mentioned. My wife was about to buy a new phone for months already but postponed it for this tax break. It might seem she spends because of the tax break but she would have spend it anyways.

There are a lot more people paying tax than posters on TV think there are. Only in the company where I work there are about 600 to 800 who pay tax of which about 50 foreigners I estimate (about 4k people here,  but about 600 to 800 above the tax exempt limit). But most posters are not connected to the working people in Thailand, do they might not know. 

There are also a lot of foreigners that work legit and pay tax as myself.

16 hours ago, webfact said:

Nuttaporn Jatusripitak, an adviser at the Prime Minister’s Office, said the campaign was aimed at people planning to buy goods and services worth up to Bt15,000 per person during the period as they would be entitled to personal income tax deductions based on the value of the items they bought.

 

7 hours ago, Baerboxer said:

 

Unless I misread this it's not an income tax break or reduction. It's the waiver of VAT on certain goods and services purchased during the period of operation. 

Businesses have to issue the customer with a VAT invoice and the customer then has to claim the VAT back.

 

 

 

Hi, i think that its not about VAT just look at what i got from the article.