Opposition Demands Clarity on Proposed Thai Tax Reforms

[webfact]

Picture courtesy: Thai Rath

 

Amidst rising concerns over potential tax changes in Thailand, the opposition People’s Party is pressing the government for clarity. With tax reform proposals currently in the study phase, speculation about a possible value-added tax (VAT) increase has sent ripples through the public and political spheres alike.

 

During the latest House session, People’s Party MP Sirikanya Tansakun called on the government to explain remarks made by Finance Minister Pichai Chunhavajira regarding the restructuring of the national tax system. While the minister has suggested these are merely ideas under consideration, the implications have brought ongoing public unease.

 

Ms Sirikanya expressed a cautious welcome towards tax reforms aiming at revenue enhancement but emphasised the necessity of transparent and substantiated government communications. Based on her interpretation of Mr Pichai's statements, the proposed reforms might set corporate tax at 15%, reduce personal income taxes to a flat 15%, and increase VAT from its longstanding rate of 7% to 15%.

 

These potential changes could lead to a significant shortfall in corporate tax revenue, around 190 billion Thai Baht, Ms Sirikanya noted. Moreover, individuals earning less than 300,000 Thai Baht monthly could face heightened income tax rates, calling into question the efficacy and equity of such reforms.

"I remain perplexed as to how this strategy will fulfil its promise of increasing government revenue with minimal public impact," Ms Sirikanya stated. "If unaware of this potential revenue dip, why consider elevating VAT to compensate?"

 

Mr Pichai's suggestion of elevating VAT — a rate unchanged for 30 years — to as high as 15% was swiftly countered by Prime Minister Paetongtarn Shinawatra. Furthermore, the idea of a standard 15% personal income tax rate is positioned to attract international expertise, rather than replace the current progressive system.

 

Ms Sirikanya further speculated that lowering corporate taxes might align with global norms set by the Organisation for Economic Co-operation and Development (OECD), which advocates a minimum 15% corporate tax for multinationals with sales exceeding 750 million euros.

 

Deputy Finance Minister Julapun Amornvivat acknowledged the need for greater tax revenue to underpin universal welfare initiatives. With tax revenues contributing merely 14% to Thailand's GDP, against a global average of 18%, the ministry is actively studying new revenue streams, reported Bangkok Post.

 

-- 2024-12-13

 

 

[ukrules]

Nobody knows anything, even the MPs

[daveAustin]

They are right to question it. Governments should leave tax well alone, unless it’s a reduction for the little man. Stop meddling for personal agendas and causing strife to ordinary people. 

[ukrules]

5 minutes ago, daveAustin said:

They are right to question it. Governments should leave tax well alone, unless it’s a reduction for the little man. Stop meddling for personal agendas and causing strife to ordinary people. 

 

Ok, they want the extra money alright.

The twisted narrative that the OECD setting a minimum tax rate is never supposed to justify tax cuts - it's there to encourage increases where large multi nationals are paying nothing. Yet here we are - Thailand considering corporation tax reductions but public VAT increases.

Couldn't make it up.