Revenue, Excise Depts Agree To Tax Cuts

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Revenue, Excise Depts Agree to Tax Cuts

The Revenue and Excise departments have initially agreed to several tax cuts proposed by the Pheu Thai-led government, but they say the plan is subject to further consideration once an official policy is created.

Revenue Department Director-General Satit Rangkasiri said the Pheu Thai Party's campaign promises to cut business income tax from 30 percent to 23 percent next year and to 20 percent in 2013, are feasible and consistent with the global trend, in which this type of tax is likely to become lower.

In addition, he said the launch of the ASEAN Economic Community in 2015 will allow for free movement of funds with the removal of barriers to trade such as excise taxes.

Satit noted that with high taxes, Thailand may lose foreign investors to neighboring countries that collect taxes at lower rates. For instance, in Singapore and Hong Kong, business taxes are lower than 20 percent, while most Asian countries collect the tax at rates of between 20-25 percent. Thailand and the Philippines are the only two countries in Asia where business taxes are higher than 30 percent.

However, he said Thailand is not in urgent need of slashing the tax, as it is still seen as a more attractive market

The head of the Revenue Department stressed that Thais should not be too concerned about the fact that a tax reduction will give the state less revenue, because, on the other hand, it will boost investments, employment, and private consumption. As a result, his department will be able to collect more revenue from personal income and value added taxes.

As for a tax refund for first-home buyers and a cut to the property tax, Satit said his agency wants more details from the new government before giving any feedback.

Regarding the policy on a tax return for first-time car owners, Excise Department Director-General Pongpanu Sawetarun said the idea is interesting, but he suggested the government create measures to prevent imposition or other fraudulent activities when the program is implemented.

He pointed out that the policy will not greatly affect the state's income because it only applies to compact and fuel-efficient vehicles.

Meanwhile, Pongpanu voiced support for the proposed cancellation of the Oil Fund, saying it will allow prices to move freely according to the market mechanism.

Yet he disapproved of any further cuts to the excise tax on oil to lower pump prices, because it will lead to wasteful use of the fuel.

Pongpanu advised that the incoming government should not renew subsidization on diesel, which is due to expire in September.

-- Tan Network 2011-07-07

[CWMcMurray]

I would guess that all of the people screaming about how the additional cost of min wage rates would put companies out of business will be happy to see this...

If corporate taxes are reduced from 30% to 23% next year that should more than pay for the additional labor costs...

[mccw]

^ the problem isn't that but where is all the money going to come from for all the spending programs

[bob4you]

If you believe all of the pre-election promises you probably believe pigs can fly also.

[Pib]

The head of the Revenue Department stressed that Thais should not be too concerned about the fact that a tax reduction will give the state less revenue, because, on the other hand, it will boost investments, employment, and private consumption. As a result, his department will be able to collect more revenue from personal income and value added taxes.

If this was true then the govt would have implemented this years ago. Politicians/bureaucrats will say anything, usually out of both sides of their mouth.