The Thai Government Is Missing Out On A Lot Of Money

[CWMcMurray]

I was reading about the changes in the "O" visas and its sounds like the Thai government is trying ensure that it can collect taxes from its foreign residents.

It got me to start thinking about all of the lost tax revenue because of the difficulty some people have had in getting workpermits. I have seen the posts by many on this website talking about this. So lets try and make a very rough estimate on the lost revenue:

Lets say those who can't get a work permit under the current system generally make less- around 30,000 a month plus we will say a one month bonus at the end of the year. This means an anual income of 390,000 minus deductions (100,000 + 30,000) leaves a total taxable income of 260,000 * 10% = 26,000 baht in taxes per year/person

Then we have to estimate the total number of "illegal workers" in Thailand - I really have no idea about this, so I will just pull a random number out of the air and hope that someone who has a better idea than me will give us a more acurate number.

Lets say 1,000 teachers:

1,000 * 26,000 = 26,000,000 baht in lost tax revenue and I have a feeling that this number is much lower than the actual number.

We haven't even considered all of the lost revenue from work permit fees.

Some may argue about qualifications or lack there of but there is already a governemnt aproved precedent that I am sure most of us have heard about - the Nontaburi Project.

I would be interested in what everyone thinks or if anyone has any ideas about "better" numbers than the ones I used.

[fat boy slim]

I would agree with your statements, but lets say the government were to set a new lower limit to apply for a work permit. Currently I think it is about 50,000 baht/ month, and were to set it at a new lower limit of say 30,000 baht, which I think is the industry norm for beginner english teachers, then I feel that many of the people who have work permits and have to declare that they are earning 50,000 baht per month ( when they are not ), would just lower their stated income to the new lower level.

Maybe the losses this way would outway the gains in tax from the new permit holders coming in.

What do you think

[PeaceBlondie]

As a wild guess, there are probably multiple thousands of farang teachers in Thailand without work permits. I doubt they file income tax returns, even though some of their employers withhold income tax without having a tax ID number with which to remit the withheld taxes to the treasury. And when my salary of 25K was being withheld, the income tax was about 900 baht per month, by a government school. Second govt. school never bothered with such nonsense.

I don't think the monthly salary limits for different nationalities apply to teachers.

Even if it's 100 million baht lost in revenue, compare that to the annual Thai education ministry's budget, or what the govt. collects from Thais in income tax.

Finally, many illegal teachers without work permits are only being paid for 9 to 11 months per year, not 13 months.

[Ijustwannateach]

A lot of times, schools will pay taxes on foreign teachers even when they don't have work permits- calling them "consultants," "part time employees," etc., etc. They do this so in the event they get caught they won't suffer tax law penalties as well.

[CWMcMurray]

Even if it's 100 million baht lost in revenue, compare that to the annual Thai education ministry's budget, or what the govt. collects from Thais in income tax.

Finally, many illegal teachers without work permits are only being paid for 9 to 11 months per year, not 13 months.

I realize that in the grand scheme of things as a percentage of the budget it may not be a huge number but I don't think they have any intentions of eliminating all of the non work permit teachers in Thailand. If they did it would cause a major hiccup in the education system until they could all be replaced if it would even be posiible to do so; not to mention the enforcment costs in both time and money.

So if they are not going to throw them all out why not just try and bring everyone into the system? They have already set the precedent that a BA is not required so that is not even an issue. It is in essence a way to collect the money and also once everyone is in the system it would be possible to better monitor and even posibly improve the education system.

I don't know if I am being overly opptimistic or not but I have only been here for 3 years...

Good point on the fact that people who are currently claiming more than they make, I hadn't considered that; also good point on the fact that not everyone gets paid for 12 months and gets a bonus.

Also what about non teachers? Does anyone know if there are alot of non teachers working without a work permit?

[torrenova]

I think Sunbelt stated that a WP does not require 50k per month and there is no actual figure but 50k is used as "sufficient" to dot the "i"s and cross the "t"s.

[lopburi3]

I do not believe anything more than 35k is expected for a work permit issue. The 50k range is for westerners to extend there stay on a yearly basis from Immigration; and believe teachers/reporters and some others are exempt.

[torrenova]

There is a list of emepmtions, teachers and reporters are two I know of. I think Sunbelt said that as an "executive" they would look for Bt35k.

[TerryLH]

"I do not believe anything more than 35k is expected for a work permit issue."

I know a teacher that had a work permit and was on 18k a month. Many more less than 35k.

None that I know are working in BKK, so maybe the 35k is a BKK thing.