Expats in Thailand urged not to worry about negative income tax

[webfact]

 

ANALYSIS

 

Recent discussions around a possible negative income tax (NIT) system in Thailand have caused ripples of concern among expatriate communities. However, it's essential to understand that these developments are still in the discussion phase, and any legislative changes are not imminent.

 

The concept of NIT is being examined by some factions within the Thai government but translating such discussions into law will take considerable time, writes Barry Kenyon for Pattaya Mail

 

Deputy Finance Minister Julapun Amornvivat, a supporter of NIT, has indicated that formal implementation might be several years away. At present, there is no concrete framework or schedule for its introduction, warranting a cautious approach rather than alarm.

 

The fundamental idea behind NIT is to provide financial assistance to individuals who earn below a minimum income level set by the government. This assistance would come in the form of cash subsidies, intended to help groups such as the elderly, unemployed, and those living on marginal incomes.

 

Payments would likely be managed through digital platforms like Paotong and other e-wallet systems, streamlining the process. However, significant details, such as income thresholds and eligibility criteria, are yet to be fleshed out.

 

Often referred to as "workfare," NIT implies that every Thai citizen earning even a minimal amount must register with the Thai Revenue Department and submit annual tax returns. This would bring into the fold many low-income workers, like street vendors and massage therapists, who currently exist outside formal taxation.

 

Over time, as incomes increase, these individuals might become taxpayers rather than benefit recipients, which illustrates a broader governmental objective.

 

The real purpose behind NIT is to substantially increase Thailand's taxpayer base, which currently stands at less than 30%. Given that Thailand is on the brink of becoming a super-aged society, expanding tax contributions is viewed as essential for maintaining social security systems without straining resources.

Despite these discussions, the introduction of NIT in Thailand is far from a certainty. Implementing such a system would require significant budget allocations and mark a shift towards more centralised control over the population's finances.

 

Critics often argue that the NIT model suits more advanced economies and may not be suitable for a developing country like Thailand.

 

For expatriates in Thailand, the implications of a potential NIT system remain entirely speculative. The "crunch time," when such policies may come into effect, is still several years off, and any impacts on expats, if they occur, are yet to be determined.

 

Until more concrete information emerges, expatriates should remain observant but not overly concerned about these developments. The key is to stay informed and prepared for any changes that may come in the distant future.

 

Picture courtesy: Freepik

 

-- 2024-10-18

 

 

[motdaeng]

1 hour ago, webfact said:

Critics often argue that the NIT model suits more advanced economies and may not be suitable for a developing country like Thailand.

 

to improve the living conditions of the poorest people, different approaches are needed. corruption must be tackled consistently,

starting with all government officials. a fair justice system must be established, and equal opportunities for everyone must be ensured,

including for the "ordinary people" ... 

 

simply giving money to low-income earners or to the poor is not a long-term solution. in a developing country with widespread corruption,

trying to create a "welfare solution" only leads to more injustices and more chances for corruption ... 

 

[bigt3116]

This will be for Thai nationals only, so why on earth would any expat worry?

 

This really is a non-news item.

[Gottfrid]

How in the world will this have any impact on expats living in Thailand? This is aimed at low income sector. If there are expats in Thailand affected by that, then they are surely breaking the rules one way or another by living here with lower means than stipulated.

[spidermike007]

Just get rid of corruption and there will be more than enough money to go around, start by jailing government officials, police, customs and immigration creeps, who are collecting fees for hiring. It is a disgusting practice, is the polar opposite of a meritocracy, and it needs to be abolished. Having to pay for your position is deplorable. Lock them up. 

[dinsdale]

17 minutes ago, motdaeng said:

 

to improve the living conditions of the poorest people, different approaches are needed. corruption must be tackled consistently,

starting with all government officials. a fair justice system must be established, and equal opportunities for everyone must be ensured,

including for the "ordinary people" ... 

 

simply giving money to low-income earners or to the poor is not a long-term solution. in a developing country with widespread corruption,

trying to create a "welfare solution" only leads to more injustices and more chances for corruption ... 

 

Justified sentiments bad sadly idealistic. This would mean the establishment giving up their wealth and power. Political parties voted in by the majority of the public are dissolved to maintain such wealth and power by said corruption.

[hotchilli]

2 minutes ago, spidermike007 said:

Just get rid of corruption and there will be more than enough money to go around, start by jailing government officials, police, customs and immigration creeps, who are collecting fees for hiring. It is a disgusting practice, is the polar opposite of a meritocracy, and it needs to be abolished. Having to pay for your position is deplorable. Lock them up. 

Agreed, the corruption and undeclared incomes/savings must be in the trillions of baht.

[Bravoxray]

https://fintechnews.sg/97066/digitalassets/bank-of-thailand-to-test-programmable-payments-in-enhanced-sandbox/

What is more likely to happen is that the Central Bank will implement their programmable Central bank Digital Currency (CBDC) and once that is done the controllers will be able to do as they please with our money. There needs to be a law that bans the Central Bank from even offering a CBDC in any form to individuals. And for those who think that they do nothing to be punished, they should ask themselves what happens if a not very friendly government takes power? Maybe expats will be exempted, but the goal of the globalists is a single world programmable digital currency from which no one will be exempt if they get their way. A one world programmable CBDC linked to digital IDs and ESG behavioral scoring spell slavery, no privacy at all and no freedom.  

[dinsdale]

14 minutes ago, spidermike007 said:

Just get rid of corruption and there will be more than enough money to go around, start by jailing government officials, police, customs and immigration creeps, who are collecting fees for hiring. It is a disgusting practice, is the polar opposite of a meritocracy, and it needs to be abolished. Having to pay for your position is deplorable. Lock them up. 

Paid for positions are part of the endemically corrupt system. Just as an example there is not one director of any school in Thailand that has not paid to get their position. The higher status the school the higher the price paid. Said paid money is then got back through high wages and corruption.

[spidermike007]

The authorities should probe their own recruitment methods and why money is required to purchase a promotion and merit is never a consideration. Then they should prove the administrator and do the same. Then they should probe customs, immigration, all tambon, state and federal recruitment. It is all the same. Filthy from top to bottom. No promotions without payment. Corruption, at all levels. A completely broken system. 

 

Of course this is just a silly dream, everybody's making so much money with this bizarre patronage system, when hundreds of thousands of baht are being paid for a low position and millions are being paid for a high position. The fortunes that are being made and the illegal and illicit funds that are being collected are astonishing and shameful. 

[bigt3116]

15 minutes ago, dinsdale said:

Just as an example there is not one director of any school in Thailand that has not paid to get their position.

 

And your evidence of this is?

[PeachCH]

A dead birth from the beginning 

[Tom100]

27 minutes ago, bigt3116 said:

This will be for Thai nationals only, so why on earth would any expat worry?

 

This really is a non-news item.

It is important because Thailand has a large deficit and is spending money faster than government tax revenues increase...The 2024 budget deficit is expected to be 693 billion baht with a 9.3% increase in y/y spending rise. 

 

Increased taxation of tourists/farang eventually will be required to fund the government social spending in this ageing country

[Expat68]

It is exactly has what of my friends have been saying, until there is anything concrete just wait and see. There is actually a query form specific to Double Taxation Agreement, on the HMRC website which you can submit and they will get back to you (that is of course if you want to get in touch with them because you have to fill in personal details) 😜 😜 

[DPKANKAN]

They basically forget that all the money we expats bring in stays in the Country and helps all the local community's we live in and spend it in. P.S. That is after already paying tax on it in our own Country for most of us!!!!

[Pouatchee]

2 hours ago, webfact said:

Over time, as incomes increase, these individuals might become taxpayers rather than benefit recipients, which illustrates a broader governmental objective.

 

dream on... if they get benefits or free money why would they bother? to improve themselves? 555

[chiang mai]

1 hour ago, bigt3116 said:

This will be for Thai nationals only, so why on earth would any expat worry?

 

This really is a non-news item.

Not so. If adopted, the system would mean that EVERY Thai tax resident would have to file a tax return each year, regardless of assessable income levels. But as the article says, it is some way off, potentially never.

[chiang mai]

I'm a fan of negative income tax because I think it is of great potential benefit. For one thing, it provides a massive incentive to declare earnings and will reduce the extent of the grey or informal economy and help eliminate poverty. It is a win win scenario

[thailand49]

Register so they can help the Thai people! 

It is to help themselves.

[LivinLOS]

1 hour ago, bigt3116 said:

This will be for Thai nationals only, so why on earth would any expat worry?

 

This really is a non-news item.

It would be for all tax residents. Which most expats are.. 

Get ready for next years tax filings. 

[Presnock]

1 hour ago, motdaeng said:

 

to improve the living conditions of the poorest people, different approaches are needed. corruption must be tackled consistently,

starting with all government officials. a fair justice system must be established, and equal opportunities for everyone must be ensured,

including for the "ordinary people" ... 

 

simply giving money to low-income earners or to the poor is not a long-term solution. in a developing country with widespread corruption,

trying to create a "welfare solution" only leads to more injustices and more chances for corruption ... 

 

Yes by throwing money at the poverty has proven throughout the history of just about every country imaginable to be useless in that it just translates into the poor begging for more instead of acutally creating jobs for those people,  I have watched many years of this in the US as they still try to solve the poverty by throwning good money after bad over and over.  my opinion on this issue anyway.

[Red Phoenix]

50 minutes ago, Tom100 said:

It is important because Thailand has a large deficit and is spending money faster than government tax revenues increase...The 2024 budget deficit is expected to be 693 billion baht with a 9.3% increase in y/y spending rise. 

 

Increased taxation of tourists/farang eventually will be required to fund the government social spending in this ageing country

Although I agree with your assessment that it will eventually affect tourists/farangs that sentence in bold was NOT in the article.

[mfd101]

11 minutes ago, LivinLOS said:

It would be for all tax residents. Which most expats are.

You'ld have to be a NITwit to think there'll be any benefit for expats out of such a scheme.

 

And will my aged PILs - illiterate & without income beyond what I give them - have to register? They wouldn't know the meanings of the words.

 

As for the appalling corruption at every level of government and society, much of it would disappear if bureaucrats were actually paid a liveable salary ...

[bigt3116]

20 minutes ago, chiang mai said:

Not so. If adopted, the system would mean that EVERY Thai tax resident would have to file a tax return each year, regardless of assessable income levels. But as the article says, it is some way off, potentially never.

 

14 minutes ago, LivinLOS said:

It would be for all tax residents. Which most expats are.. 

 

This will be covered by the new 'every penny you have will be taxed' policy.

 

Negative income tax will not affect a single expat, not one, less than one, the answer to 1-1 = How many expats this will affect.

[ikke1959]

In the Thai system you are never sure what will happen..Every day there can be a sudden twist of a law being implemented.. No wonder expats are worried.. Look at the new tax model

[chiang mai]

5 minutes ago, bigt3116 said:

 

 

This will be covered by the new 'every penny you have will be taxed' policy.

 

Negative income tax will not affect a single expat, not one, less than one, the answer to 1-1 = How many expats this will affect.

Once again, if negative income tax is implemented, everyone in the country will be required to file a return, including expats. Expats will not see any benefit from that but many of Thailand's poor people will. Many Thai people are exactly the same as foreigners in so much as they do not understand how much tax they will pay on their income. If they would figure out the answer to that question, they would understand that negative income tax will increase their earnings.

[ChaiyaTH]

The fact it is still 'several years' under way does not change the fact it will happen and means I might as well move in with life today. I just saw some docu again as well where Thailand is one of the leader users if it comes to bridge projects for Central Bank Digital Currency. 

This all makes taxing people super easy as well as to control them much more, to such extend, Netherlands even turned it down for now by not allocating any budgets to implement it further for now. This is also for digital passports, digital vaccine passports and more.

 

I dare to guarantee for my pinky finger that this taxing will happen within years. It is super interesting that now Trump nearly wins, and European elected parties start fighting against it, that TH now announces it could a few years more.

Guess that makes the 2030 deadline very real. The big reset. Next elections if Trump wins this one. Might as well enjoy the next 5 years to come as the last 5 years of the old world.

[KannikaP]

1 hour ago, Gottfrid said:

then they are surely breaking the rules one way or another by living here with lower means than stipulated.

What 'means' are stipulated, either 65k per month to spend entirely or 800k in the bank. If using the latter, no actual income is stipulated, you could be living off your Wife's income.

[watchcat]

8 minutes ago, chiang mai said:

This is the Thai News Section hence it is news, it's just not necessarily about foreigners however!

 

Reading the headline, it sounds like it.

[pomchop]

File this away with things i don't control, have no say in ,likely won't impact me and thus not going to worry about it.  That is a pretty full file of items over the years.