Everyone Has To Pay Their Fair Share Of Revenue: Thai Opinion

[webfact]

EDITORIAL

Everyone has to pay their fair share of revenue

The Nation

BANGKOK: -- It's time that Thailand revamped its tax system to ensure that collection is equitable and loopholes are made harder to jump through

US President Barack Obama is calling on Congress to increase taxes on millionaires. Although the plan - scheduled for a vote in the Democrat-controlled Senate on April 16 - stands little chance of passing Congress, the refreshing proposal from the president has revived the debate about making tax collection fairer to all groups of people.

The proposal, made during this US election year, may be part of an effort to portray the Democrat Party as a champion of economic fairness. It could also be a reaction to comments made by Warren Buffett, the billionaire investor, who said that wealthy people like himself pay a smaller share of their income in US federal taxes than middle-class taxpayers. In making this proposal, Obama will want to have voters compare his tax stance to that of the Republicans. Despite the political motives, the president's proposal - which was first made last September - has provoked new debate about social injustice.

The question over fair tax collection also resonates among taxpayers in Thailand. This country certainly needs reform to create an effective system under which every citizen can financially support national development commensurate with their ability to pay. Thai government officials often talk about the need for tax reform, but realistic changes have never materialised. Thailand currently uses a progressive income tax system, with taxes on personal income charged at five rates: zero per cent, 10 per cent, 20 per cent, 30 per cent and 37 per cent for people earning Bt4 million or more per year in taxable income. The progressive rate is designed to keep inequality in check, with the richer paying more and the poorer paying less. However, loopholes in the system have made tax collection ineffective and unjust. Income tax fraud and evasion are widespread; across the business sector, in agriculture, and in the informal economy, names never appear in the tax collection system.

Meanwhile, the rich manage to exploit the loopholes to evade paying their fair share, and are assisted by waivers for such items as special investment income. The hard-working middle classes are squeezed in between.

Thailand's tax base is small. The country has an estimated 10 million individual taxpayers, but only around 2 million actually pay taxes. Bangkok accounts for more than 65 per cent of total taxes collected by the Revenue Department, in terms of geographic location. It is essential the tax collection base become more diversified.

The loopholes are leading to wider debate over tax payment. The recent decision by the Revenue Department not to collect Bt12 billion in tax incurred by Panthongtae and Pinthongta Shinawatra from the convoluted sale of ShinCorp shares by their father Thaksin (to them and eventually to Temasek Holdings of Singapore) is among these topics. The Revenue Department decided not to pursue a case against Panthongtae and Pinthongta, citing a court decision that the shares actually belonged to fugitive former premier Thaksin, not his children.

The verdict raises the question whether the Revenue Department will apply this kind of lenient treatment to ordinary people, especially when there are issues regarding tax assessment.

As US President Obama tries to dissuade Congress from providing tax exemptions to people "who don't need them", Thai Prime Minister Yingluck Shinawatra should consider a similar course of action in order to reduce the economic disparity in Thailand, which only seems to be getting worse. The government needs to adopt a holistic approach in striving for comprehensive tax reform. The current system allows tax evasion by the rich to be too easy. Unpalatable and controversial (for the rich) taxes may have to be introduced and enforced, including inheritance tax, capital gains tax and land tax for speculators. Big landowners should also be appropriately charged.

All citizens must be reminded that tax payment is a duty, and that revenues raised are used to support and promote education and public health, among other essential services. We need to become aware that we all have a duty to contribute to social welfare and justice through fair and equitable tax payments.

-- The Nation 2012-04-03

[jpp2bkk]

In a country where corruption is part of the culture, how do they expect to get income taxes, law makers are the first to avoid it.

[Thai at Heart]

Quickest simplest way to tax the rich in this country is to put up VAT. Basic foodstuffs in the market are never VAT rated in Thailand so to say that it effects the poor the same way that it effects the rich isn't altogether true. You can play with allowances for the poorest to equalise it, and then put up VAT which is on the quickest way to squeeze more out of the rich since they tend to shop in places that VAT is placed on the bill. Why do they persist with this nonsense tax on imported cars? Because no one declares their incomes properly here (other than employees in larger businesses) so it is the easiest way to lever a couple of million out of a company or individual.

Beyond that, I would suggest that they bring down all income tax rates and wack up VAT anyway, it would start the process of bringing so much of the black economy into the legal because it would be worth it to companies to do so. As for land tax, well, it is astonishingly naive that they haven't gone ahead and implemented this, but then since when do turkeys vote for xmas.

[MissOriental]

I'm 24 years old and I'm earning 28k/month = 336k a year and I fall into the 10 percent category and receive 60k/year exemption for my expense each year. EACH YEAR. Roughly, I spend about 24-25k a month living in the city, paying the rent, food and all the commodity. Then I have to pay five percent for my healthcare which I never use (I've got health and life insurances) and three percent is deducted from my wage for tax which I think is an acceptable amount for me to pay. BUT 10 percent that will go toward the corrupt government? I CAN'T accept it. I don't have a house or a car and honestly? They are necessities in my life but I can't afford to buy a house and a car for myself because this <deleted> ridiculous tax system. Not to talk about savings for when I'm older. I don't mind paying 10 percent if I earn like 70k a month but I'm not. I can't even use public properties like footpath which is notoriously owned by street stalls and motorbike taxis.

Edited April 3, 2012 by MissOriental

[DP25]

This government has a greater chance of landing someone on the moon than of forcing the rich to pay their taxes. This government is concerned with tax avoidance for the rich, not tax collection.

[thaimat]

"Everyone has to pay their fair share of revenue"

Does this include Thaksin and his family?

[belg]

biggest example : PM changing law to pay 0 baht on 37 billion ....

what is fair ? most people do not pay tax in thailand and the government is playing with the taxes of the middle class to chase their ill promises to the poor the lied to

[Hyponeros]

My problem is not to pay taxes, my problem is what those corrupt politicians are doing with it! And i don't want my money to be used by one of the multiple corrupt generals to pay for his 4th house or his fifth minor wife!

Moreover 2 milion only paying taxes???? This is ridiculous! And what percentage of them are actually Thai?

[bigbamboo]

"Everyone has to pay their fair share of revenue"

Does this include Thaksin and his family?

Ouch! If Mr T had played the game fair and square then the coup would not have been so widely accepted as it was at the time. He lost a lot of brownie points with the ordinary Thai over that particular dodge.

[inkorat]

The voters who put this government in place are mostly farmers and 99% of them do not pay any tax, but they have the votes and get the benefits. The 2 million tax payers on the other side, who are paying the bills for the other 58 million people, must be ready to jump off a bridge. No tax without representation, this does not apply in Thailand.

[DP25]

Moreover 2 milion only paying taxes???? This is ridiculous! And what percentage of them are actually Thai?

Well, most of them are Thai. At the highest level though there are certainly a lot of foreigners, but I don't know how many. In all of Thailand, only 60,000 are paying the highest tax rate, which is for income over 4 million baht per year. A good chunk of them must be foreigners, there are many highly paid expats and they can't avoid paying taxes like Thais can. This 60,000 people by the way, account for 1/2 of the income tax collected each year.

source http://www.nationmultimedia.com/2011/09/07/opinion/Middle-class-may-rebel-against-populist-policies-30164639.html

In addition to the 2 million that pay, only a total 10 million are even registered to pay taxes. The other 25 million Thais are all working under the table. Most don't make enough to pay income tax, but millions of them do. And of those 8 million that ARE registered but don't pay due to low salary, many have part time jobs that are under the table. This country has serious problems. Thais make the Greeks look like responsible tax payers.

[trainman34014]

I don't understand how so few are paying tax. There are millions of people working for the state here and they have tax deducted out of their wages each month. My wife was a Midwife and she had 10% of her wages deducted every month for tax plus other bits and pieces. I simply don't believe only 2 million people are paying tax.

[trainman34014]

And another thing. We both pay tax on our savings accounts which is deducted at source. My wife gets hers back every year by filling in multiple forms and a cheque is sent to her about a month later. In the last three years this has been sent to the wrong address twice and despite constant reminders of the correct address, which they promise that they have entered on their computer, it still went to the wrong place this year! As a Farang I cannot have my tax back...even if I was a beggar.

[GarryP]

I don't understand how so few are paying tax. There are millions of people working for the state here and they have tax deducted out of their wages each month. My wife was a Midwife and she had 10% of her wages deducted every month for tax plus other bits and pieces. I simply don't believe only 2 million people are paying tax.

Because be eligible to pay you need to be earning at least Baht 15,000 a month (I recall that is the latest figure). Anything lower than that is tax free, but still subject to social security deductions. The vast majority of Thais who are working for a wage or salary (such as factory workers) are not earning enough to pay tax, even with overtime. Even with the minimum wage increase, you are only looking at a basic wage of Baht 7,500 a month.

[trainman34014]

I don't understand how so few are paying tax. There are millions of people working for the state here and they have tax deducted out of their wages each month. My wife was a Midwife and she had 10% of her wages deducted every month for tax plus other bits and pieces. I simply don't believe only 2 million people are paying tax.

Because be eligible to pay you need to be earning at least Baht 15,000 a month (I recall that is the latest figure). Anything lower than that is tax free, but still subject to social security deductions. The vast majority of Thais who are working for a wage or salary (such as factory workers) are not earning enough to pay tax, even with overtime. Even with the minimum wage increase, you are only looking at a basic wage of Baht 7,500 a month.

Agree in principle but there are far more than 2 million state workers earning more than 30,000 Baht a month, and they are all having tax deducted from their salaries every month, so where does the 2 million figure come from?

[GarryP]

I don't understand how so few are paying tax. There are millions of people working for the state here and they have tax deducted out of their wages each month. My wife was a Midwife and she had 10% of her wages deducted every month for tax plus other bits and pieces. I simply don't believe only 2 million people are paying tax.

Because be eligible to pay you need to be earning at least Baht 15,000 a month (I recall that is the latest figure). Anything lower than that is tax free, but still subject to social security deductions. The vast majority of Thais who are working for a wage or salary (such as factory workers) are not earning enough to pay tax, even with overtime. Even with the minimum wage increase, you are only looking at a basic wage of Baht 7,500 a month.

Agree in principle but there are far more than 2 million state workers earning more than 30,000 Baht a month, and they are all having tax deducted from their salaries every month, so where does the 2 million figure come from?

In a quite recent article in that other newspaper, they claimed that only 16 or 18 thousand people are in the top tax bracket and paying 37 percent. That figure alone tells me that there are a hell of a lot of rich folks who are not "officially" drawing a salary commensurate with their position from their businesses, living off "expenses" on top of a basic salary instead.

Edited April 3, 2012 by GarryP

[DP25]

Agree in principle but there are far more than 2 million state workers earning more than 30,000 Baht a month, and they are all having tax deducted from their salaries every month, so where does the 2 million figure come from?

No way in hell are anywhere near 2 million government workers making 30k a month. That is a LOT for a government worker. A PhD might make that much, but most don't. Most civil servants with a bachelors degree make around 10k per month. They've been considering a pay raise for civil servants. During the election campaign they pledged to raise salaries for college grads to 15,000 per month, that would be a big raise for most government workers.

[trainman34014]

Agree in principle but there are far more than 2 million state workers earning more than 30,000 Baht a month, and they are all having tax deducted from their salaries every month, so where does the 2 million figure come from?

No way in hell are anywhere near 2 million government workers making 30k a month. That is a LOT for a government worker. A PhD might make that much, but most don't. Most civil servants with a bachelors degree make around 10k per month. They've been considering a pay raise for civil servants. During the election campaign they pledged to raise salaries for college grads to 15,000 per month, that would be a big raise for most government workers.

I can tell you there are a good many people working in the Medical Sector who earn at least 30,000 Baht a month, and I mean at Government Hospitals not private ones. My wife was earning considerably more than that prior to retirement, Drive around the back of any Hospital and see all the new cars that belong to the staff, and they are not all bought with credit. My wife's social circle are all from the Medical Profession and there are no poor people among them I can assure you.

[DP25]

Agree in principle but there are far more than 2 million state workers earning more than 30,000 Baht a month, and they are all having tax deducted from their salaries every month, so where does the 2 million figure come from?

No way in hell are anywhere near 2 million government workers making 30k a month. That is a LOT for a government worker. A PhD might make that much, but most don't. Most civil servants with a bachelors degree make around 10k per month. They've been considering a pay raise for civil servants. During the election campaign they pledged to raise salaries for college grads to 15,000 per month, that would be a big raise for most government workers.

I can tell you there are a good many people working in the Medical Sector who earn at least 30,000 Baht a month, and I mean at Government Hospitals not private ones. My wife was earning considerably more than that prior to retirement, Drive around the back of any Hospital and see all the new cars that belong to the staff, and they are not all bought with credit. My wife's social circle are all from the Medical Profession and there are no poor people among them I can assure you.

A normal civil servant working in a government office gets near 10k per month. A PhD gets near 20k per month. Here is graph of current pay and the raise

http://nationmultime...d-30174910.html

A doctor makes more than that, even in a government hospital they can make more than 30k. People working in hospitals also get tips, and many work second jobs at private facilities. It's not just their government salary that pays for a doctor's BMW.

Edited April 3, 2012 by DP25

[farang000999]

Ive often been perplexed at the differences between salary statistics and the life style that people supposedly making these salaries lead, as alluded to above.

[trainman34014]

Ive often been perplexed at the differences between salary statistics and the life style that people supposedly making these salaries lead, as alluded to above.

Yes; there are a lot of people in my Wife's family who work in Government jobs and they earn far more than the quoted rates from DP25. I'm not suggesting the information shown is wrong for one moment but I know for sure that a large number of public employees take home a lot more than the basic rates shown. You don't have to be the most alert person to notice that there are a lot of middle class families around with State jobs that live very comfortably. They mostly live quietly and don't draw attention to themselves...they just carry on collecting money.

[farang000999]

The Thai economy is booming and prices appear to be ever increasing. I just don't buy these statistics about the so called earning rates of Thais.

[farang000999]

don't international school teachers often make 60-80k baht a month plus benefits and free schooling for their children? so they are supposedly making more than Thai doctors?

[blackthorn2005]

My problem is not to pay taxes, my problem is what those corrupt politicians are doing with it! And i don't want my money to be used by one of the multiple corrupt generals to pay for his 4th house or his fifth minor wife!

Moreover 2 milion only paying taxes???? This is ridiculous! And what percentage of them are actually Thai?

They should tax the scum of Patong, Taxis, Tuk tuk, Touts, Trans genders and jet skis, a small fortune there!

[monty1412]

wow, I just realised my girlfriend must have a phD as that is roughly what Im paying her a month... must find out what in ha

[Thai at Heart]

[quote name=trainman34014'

make a company employ everyone in the family on 20 k per month, pool the money, expense your life in the company, make a profit buy a mercedes. VAT and excise is the only way for this government to raise more money

timestamp='1333451004' post='5188794]

I don't understand how so few are paying tax. There are millions of people working for the state here and they have tax deducted out of their wages each month. My wife was a Midwife and she had 10% of her wages deducted every month for tax plus other bits and pieces. I simply don't believe only 2 million people are paying tax.

[koosdeboer]

And another thing. We both pay tax on our savings accounts which is deducted at source. My wife gets hers back every year by filling in multiple forms and a cheque is sent to her about a month later. In the last three years this has been sent to the wrong address twice and despite constant reminders of the correct address, which they promise that they have entered on their computer, it still went to the wrong place this year! As a Farang I cannot have my tax back...even if I was a beggar.

As a farang you can, I did it once. At first I had to pay a fine because I hadn't registered earlier. The woman at the tax office complained that I as a farang wanted a refund of this deducted tax. I got the check and my tax returned but my wife didn't want to go back again the next year. There must be loads of people who don't get a refund because they don't know or don't dare, farang and thai.

Posted with Thaivisa App http://apps.thaivisa.com

[lovelaos]

I'm 24 years old and I'm earning 28k/month = 336k a year and I fall into the 10 percent category and receive 60k/year exemption for my expense each year. EACH YEAR. Roughly, I spend about 24-25k a month living in the city, paying the rent, food and all the commodity. Then I have to pay five percent for my healthcare which I never use (I've got health and life insurances) and three percent is deducted from my wage for tax which I think is an acceptable amount for me to pay. BUT 10 percent that will go toward the corrupt government? I CAN'T accept it. I don't have a house or a car and honestly? They are necessities in my life but I can't afford to buy a house and a car for myself because this <deleted> ridiculous tax system. Not to talk about savings for when I'm older. I don't mind paying 10 percent if I earn like 70k a month but I'm not. I can't even use public properties like footpath which is notoriously owned by street stalls and motorbike taxis.

I fail to see why you are moaning. Perhaps you should try and get a better paying job if you don't have enough money.

[DP25]

don't international school teachers often make 60-80k baht a month plus benefits and free schooling for their children? so they are supposedly making more than Thai doctors?

They definitely make more than your average doctor at a government hospital, before their tips and overtime and other extras and any private business they may be involved in. They have a very high salary for Thailand.

Official salaries in Thailand are low, even for people with degrees. At least reported income, lots of people have income streams that are not reported. Which is why only 2 million people in Thailand pay income tax...most jobs are under the table, and even people with registered, tax paying jobs often have small businesses or other incomes that are not reported.

[bigbamboo]

Agree in principle but there are far more than 2 million state workers earning more than 30,000 Baht a month, and they are all having tax deducted from their salaries every month, so where does the 2 million figure come from?

No way in hell are anywhere near 2 million government workers making 30k a month. That is a LOT for a government worker. A PhD might make that much, but most don't. Most civil servants with a bachelors degree make around 10k per month. They've been considering a pay raise for civil servants. During the election campaign they pledged to raise salaries for college grads to 15,000 per month, that would be a big raise for most government workers.

I can tell you there are a good many people working in the Medical Sector who earn at least 30,000 Baht a month, and I mean at Government Hospitals not private ones. My wife was earning considerably more than that prior to retirement, Drive around the back of any Hospital and see all the new cars that belong to the staff, and they are not all bought with credit. My wife's social circle are all from the Medical Profession and there are no poor people among them I can assure you.

Don't forget there is a big difference between the saalries in BKK and the rest of the country. My wife was a senior surgical nurse and she earned around 15k in CM. That would have been double in BKK