PM Yingluck's Advisor Virabongsa Calls For Hike In VAT

[belg]

exemptions ? i am not rich but i pay 15 % revenue tax on every baht of income of intrest true the bank ...; that is many times more than most people in thailand that earn little, pay no tax and get free credit cards, loans they don't have to pay back, etc....

labour intensive should move to other countries? and i tought thailand was a hub of cheap unskilled labour and farmers (most of people outside bangkok anyway)

thais must really think they are the best of the world and technology is theirs to take ...

who is smoking all that weed they just intercepted ?

Edited April 28, 2012 by belg

[bigbamboo]

"This would result in additional revenue of Bt60 billion for the country, which would enable us to ease other types of tax collection," he said.

Great news, now they can afford to return the B46 billion to Thaksin, and still have some left over for further tax cuts for the rich and corporations

You old cynic... as if PTP would tax the poor to pay Thaksin and his rich cronies!

[Boss]

Instead : Broaden the number of VAT payers. Around here, in Krabi, NO Thai owned businesses pay VAT or any other taxes. Don't

[Arkady]

"Taxation tends to have the heaviest impact on middle-income earners, Virabongsa said, because existing tax measures contain many exemptions, making it hard for the government to collect more from the rich,"

Here's a bright idea .... remove the loopholes make the rich pay their fair share of taxes.

Good forbid they give the poor a middle class a chance and a break.

Good forbid the poor and middle class are able to afford to eat more than mama noodles

towards the end of their pay periods.

I would think that the poor will get the biggest hit from a VAT increase. Since they spend everything they get and more, their monthly VAT payment as a percentage of their incomes is much higher than others who have the luxury of saving some of their income. It will have a direct effect on the cost of living and inflation, just as the red shirts are complaining that the government they were paid to vote for is doing nothing about the cost of living.

On the other hand it is inevitable. PT is needs lots of money for its grandiose schemes and to fill its own pockets. They are cutting corporation tax and are unwilling to tax listed company capital gains, inheritances or land as that would affect the wealthy. The only option left is to increase the tax burden on the poor. PT is like the Republican Party in the US that uses emotional issues like abortion to get the poor white trash to vote for the party that always favours the rich over the poor. Basically PT is owned by a rich businessman and its priority to promote his interests.

Virabongsa has never been the sharpest tool in the shed and is known as an incredibly dull and self important speaker but at least he used to be extremely conservative and prudent in fiscal and monetary affairs which is the only thing he ever had going for him. Now he has thrown all caution to the winds in order to please his new boss. I suppose he views the boss's patronage as the last chance to line his coffin before the grim reaper steps in. Sad.

Shoving out the low value added industries to Burma is fine for the Thai brand owners who can decide where their products are manufactured for sale in Thailand like the Sahapat Group that controls much of the Thai consumer goods markets. But for OEM manufacturers who are making stuff for foreign brand owners for export, it is a different story. They have no competitive advantage setting up sweatshops in Burma over Indians, Singaporeans, Chinese or Burmese investors and lacking an international outlook and language skills will not survive well there.

Edited April 28, 2012 by Arkady

[farang000999]

He also suggested that labour-intensive industry should move to neighbouring countries or they would not be able to survive, as technology would replace manpower in the Kingdom.

Ok thats fine...... Just what do they propose to do with the population after technology takes over?

Ask the Americans, Europeans, Germans, Japanese, Koreans, Singaporeans, Hong Kongians what happened when technology took over.

[volk666]

Apart from VAT increase there's nothing particularly wrong with Virabongsa's ideas, they are kind of self evident - infrastructure, railways, etc. As I said earlier - they are like an Excalibur stuck in a rock, big, shiny, powerful, the problem no one can pull it out, on in case of these ideas no one can pull them off.

Most people with power here realize that and, out of modesty, I guess, don't boast about things they can't solve, even in politics very few take these ideas seriously, they are election time decorations on the cake of handouts and debt moratoriums. Right now they sound out of place and out of step with the general flow of events here.

Virabongsa, however, is running for the BOT chairman post, he needs to make big impressions, hence grandiose plans. Yet another economist turned into a politician and started spewing garbage to get votes. Oh well...

Thailand does face a labor shortage but in specific areas. Many factories import Burmese to work here, it's not a bad idea to move those factories to Burma instead, it will have little effect on a labor situation here.

After a decade of tight fiscal discipline Thailand can indeed afford to loosen up a bit and start borrowing and investing and using reserves, current rate of progress is insufficient to join the big boys and move up the chain on the world stage, they need to take risks to get there, there's nothing wrong with that.

What they should tell people, however, that not everybody will benefit from this jump and the country will have maybe ten-twenty percent of useless, unemployed population that will be forever locked out.

When they think they want to be like Europe they don't consider high unemployment and big riots every couple of years with looting and burning cars, Thais are more likely to import that feature first, way before the country start looking like Switzerland.

Democrats, on the other hand, are busy picking their noses and exchanging porn pictures on their iPhones rather than talking about the future PTP is taking people to. They have a very nice opportunity to differentiate themselves and offer an alternative way to develop the country. They don't even need to throw mud at PTP, just use PTP's own ideas to define them as a party leading to high growth, high inflation, high prices, high unemployment and millions of poor being left out and forgotten so that the rich may look good with their spanking new trains and airports.

It's a bit of a human behavior paradox here that PTP uses to its own advantage - they make poor people feel proud of how well the rich are doing. Thaksin flying everywhere in a personal jet - hooray! PTT had another year of incredible profits - hooray, distracts them from contemplating high fuel prices at the pump.

Rant over.

[farang000999]

these ideas they have are not inherently terrible except that we know their main goal is creating an outlet for graft. also, these things need to be funded top down. the big problem in thailand is the lack of wealth distribution. But taxing the rich is off limits for both parties.

[allan michaud]

He also suggested that labour-intensive industry should move to neighbouring countries or they would not be able to survive, as technology would replace manpower in the Kingdom.

Ok thats fine...... Just what do they propose to do with the population after technology takes over?

They will still need someone, to polish the robots, I guess.

I remember back in the 70's and 80's all the British politicians promising that technology would bring a future where everyone was better off and had more free time. As we can all see this didn't happen, it just meant the few at the top got richer as they didn't need to waste good money on paying peasants. I don't think being unemployed was quite what we had in mind when they talked about more free time.

This was part of the backdrop to crushing the unions.

[kutjebu]

In many countries in Europe is it 20% or higher.I can live with that.

[Crushdepth]

I think increasing VAT is an excellent idea. The increased revenue screwed out of consumers can be used to offset a lower corporate tax rate.

[Crushdepth]

He also suggested that labour-intensive industry should move to neighbouring countries or they would not be able to survive, as technology would replace manpower in the Kingdom.

Ok thats fine...... Just what do they propose to do with the population after technology takes over?

The excess population will be given jobs on construction sites and the problem will go away.

[Payboy]

He also suggested that labour-intensive industry should move to neighbouring countries or they would not be able to survive, as technology would replace manpower in the Kingdom.

Ok thats fine...... Just what do they propose to do with the population after technology takes over?

The excess population will be given jobs on construction sites and the problem will go away.

In Burma.

[KKvampire]

Governments who are weak and ineffective in other tax measures, particularly failing to catch up with those who engage in avoidance, always go to the sales tax option, Its easy to collect but it also hurts the low and middle classes, One has to think who are the Wealthy in Thailand avoiding paying their taxes? We know from experience its businessmen and women with connections to politicians, and the Corrupt wheel goes around

Edited April 28, 2012 by KKvampire

[geriatrickid]

^ It has seemed to me that the current government has been pursuing inflationary policies since its inception. An astute businessman with foreknowledge of coming inflation could easily position his family's investments in such a way as to profit tremendously from that inflation.

Inflation is not a problem in Thailand. Thailand's inflation is running at about 3% which is on target and better than its neighbors of Vietnam - 14%, China - 3.5% , Cambodia - 5.5% and India of 9.5%.

If there is too much money available to purchase too few goods and services, or demand in the economy is outpacing supply, then one gets inflation. Typically, inflation goes hand in hand with shortages of labour and materials. Thailand does have a growing labour supply issue and with some key materials such as energy. Yet, Thaialnd is able to keep inflation in check. Think about it. As much as some foreigners in this forum wag their fingers on inflation, the fact of the matter is that the Thai economy has room for the transient inflationary impact of a VAT increase. The arguments that a VAT increase would somehow cause raging inflation are false, and in fairness none of the economists and fiscal policy folks opposed to a VAT increase are saying that. It is only the farangs of TVF that make that claim.

Inflation is an important fiscal tool. For example, one of the most respected Bank Governors in the world Mark Carney (he's now chairman of the G-20 Financial Stability Board, which is the 4th pillar of international financial governance and responsible for keeping financial markets and systems stable and solvent) had this to say on his Bank's inflation goals;

ON HITTING THE BANK'S TWO PERCENT INFLATION TARGET

"We will do what is necessary in order to achieve that (target) ... Monetary policy is exceptionally accommodative in Canada, it has been for some time. We have a well-functioning financial system. I wouldn't characterize the possibility, the observation of the Bank that in the environment of reduced economic slack and slightly firmer underlying inflation, the possibility that it may become necessary that some of the considerable monetary policy stimulus in Canada may need to be withdrawn consistent with achieving the inflation target - I would not characterize that as hitting the consumer with a two-by-four (piece of wood)."

There is too much domestic borrowing in Thailand with too much household debt. The only way to put the bakes on that is to increase interest rates gradually. Tthey cannot do that unless inflation is in the "zone" . So far, Thailand is doing the job on inflation, but has the same problem as the west in regard to getting interest rates up.

Edited April 28, 2012 by geriatrickid

[Thaddeus]

GK..... can you spell 'smoke' and 'screen'

Yet another pile of waffle designed to do one thing.

[gregb]

Inflation is not a problem in Thailand. Thailand's inflation is running at about 3% which is on target and better than its neighbors of Vietnam - 14%, China - 3.5% , Cambodia - 5.5% and India of 9.5%.

I strongly doubt the validity of these figures. What is more likely is that Thailand has more creative accountants than the other countries. My credit card bills from Tesco show the real inflation rate on things people actually buy in Thailand on average from 2010 to 2011 was 13.8%. That is a far cry from the mythical 3% figure you post here.

Oh, I don't doubt you got it from an official source. I strenuously doubt the person who provided it to that official source however.

[Skywalker69]

Inflation is not a problem in Thailand. Thailand's inflation is running at about 3% which is on target and better than its neighbors of Vietnam - 14%, China - 3.5% , Cambodia - 5.5% and India of 9.5%.

I strongly doubt the validity of these figures. What is more likely is that Thailand has more creative accountants than the other countries. My credit card bills from Tesco show the real inflation rate on things people actually buy in Thailand on average from 2010 to 2011 was 13.8%. That is a far cry from the mythical 3% figure you post here.

Oh, I don't doubt you got it from an official source. I strenuously doubt the person who provided it to that official source however.

13.8 % whow, wonder how much it will be in one year from now?

[FOODLOVER]

Red elites at it again! Stop helping already!

[maidu]

This dumb idea, hobbles on the heels of recent gov't announcement to forgive loans to the Thailand's biggest borrowers - which will cost Thai taxpayers and estimated 22.2 billion baht. Another soft landing which enables the rich to get richer. As if that's not enough, the gov't can't find a way to tax real estate. Many of the biggest real estate hoarders are the same people who get to vote yes or no on whether to tax themselves. So, besides voting to increase their own salaries, those same ding dongs get to vote to keep real estate taxes (for themselves and their rich buddies) off the agenda.

[StefanBBK]

VAT increase will be very unpopular with low income voters.

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

[oops]

If they just inforced the cart operators"Thai's" to get licensed around Thailand, also changed the laws on getting a VAT license so that everyone participate in paying they would generate more money than raising the VAT by 1%. At present I believe your company has to gross 1 plus million a year to get a vat number/ license. This shouldn't matter how much you gross you should get a tax number period and pay accordingly. I see these cart operators at the bank all the time depositing more in one day then I make all month long. Some of those cart operators make tons of money and have several properties. These people don't pay any tax except to the police but, still not like I have to pay..nor are they required to hire an account. I have to pay on monies coming and going out....very selfish tax. Then I have to pay a licensed bookkeeper to manage my work so that they can make sure I am not cheeting them.

Now I understand why most of the Thais live like they do. They live beneath their means in an attempt to elude the greed monsters on the top. .

[NanaFoods]

This dumb idea, hobbles on the heels of recent gov't announcement to forgive loans to the Thailand's biggest borrowers - which will cost Thai taxpayers and estimated 22.2 billion baht. Another soft landing which enables the rich to get richer. As if that's not enough, the gov't can't find a way to tax real estate. Many of the biggest real estate hoarders are the same people who get to vote yes or no on whether to tax themselves. So, besides voting to increase their own salaries, those same ding dongs get to vote to keep real estate taxes (for themselves and their rich buddies) off the agenda.

Perhaps on commercial property, but a real estate tax on homes is a very very bad idea.

It means no real property ownership.

And how about the effect on retired people?

[otherstuff1957]

3% inflation? If that figure is per quarter, I'll believe it. If that's the official inflation figure then the Thai government is taking a page from the US government's book of tricks: excluding some of the necessities of life from the inflationary index in order to fool people into thinking that things aren't really as expensive as they really are.

[hyperdimension]

I see these cart operators at the bank all the time depositing more in one day then I make all month long.

How much do they deposit? I'm just curious to know whether some actually make millions of baht each month.

[maidu]

This dumb idea, hobbles on the heels of recent gov't announcement to forgive loans to the Thailand's biggest borrowers - which will cost Thai taxpayers and estimated 22.2 billion baht. Another soft landing which enables the rich to get richer. As if that's not enough, the gov't can't find a way to tax real estate. Many of the biggest real estate hoarders are the same people who get to vote yes or no on whether to tax themselves. So, besides voting to increase their own salaries, those same ding dongs get to vote to keep real estate taxes (for themselves and their rich buddies) off the agenda.

Perhaps on commercial property, but a real estate tax on homes is a very very bad idea. It means no real property ownership. And how about the effect on retired people?

You must not be from the US. Real estate tax is for everyone there. It may not be a great system, but American infrastructure is quite good - paid for largely from taxes.

Why would taxation preclude property ownership (as you allude to)?

If a retired person can buy a grand house and/or large parcel of nice property, then that person can also afford moderate taxes. If not, then that person should purchase something more reasonably priced. Many retired people have ample money, and it's reasonable for them to pay taxes in order to assist those at the bottom rungs. Granted, tax methods are not always fair, and certainly the ways gov't choose to allocate tax revenues are seldom wisely thought out, but that's the way the cookie crumbles.

My earlier post was addressing the Thai politicians and many other Asian fat cats who hoard large tracts of land in Thailand and pay no taxes. Similarly, if they build fancy-assed mansions and pay no taxes. Often those land parcels and houses are empty and derelict.

[volk666]

When the subject of increasing prices first came up earlier this year PTP govt denied prices were going up.

Now their supporters argue that inflation is actually good for you.

Whatever, there might be some benefits from inflation somewhere, the irony is that PTP government was supposed to put the fate of the underprivileged population first but now they pursue policies that create inequality in the first place - high growth, high prices. Someone will always miss the train, like 24 million unregistered workers who can't legally demand 300 baht minimum wage but have to pay high prices or even those legal workers upcountry who will have to pay high prices now but will get pay raise only next year.

Today there are survey results telling us 44% feel that economically they are worse off now than last year, and that's after minimum wage increase. What do they know, of course, inflation is beneficial for them, according to the latest economical wisdom.

^ It has seemed to me that the current government has been pursuing inflationary policies since its inception. An astute businessman with foreknowledge of coming inflation could easily position his family's investments in such a way as to profit tremendously from that inflation.

Inflation is not a problem in Thailand. Thailand's inflation is running at about 3% which is on target and better than its neighbors of Vietnam - 14%, China - 3.5% , Cambodia - 5.5% and India of 9.5%.

If there is too much money available to purchase too few goods and services, or demand in the economy is outpacing supply, then one gets inflation. Typically, inflation goes hand in hand with shortages of labour and materials. Thailand does have a growing labour supply issue and with some key materials such as energy. Yet, Thaialnd is able to keep inflation in check. Think about it. As much as some foreigners in this forum wag their fingers on inflation, the fact of the matter is that the Thai economy has room for the transient inflationary impact of a VAT increase. The arguments that a VAT increase would somehow cause raging inflation are false, and in fairness none of the economists and fiscal policy folks opposed to a VAT increase are saying that. It is only the farangs of TVF that make that claim.

Inflation is an important fiscal tool. For example, one of the most respected Bank Governors in the world Mark Carney (he's now chairman of the G-20 Financial Stability Board, which is the 4th pillar of international financial governance and responsible for keeping financial markets and systems stable and solvent) had this to say on his Bank's inflation goals;

ON HITTING THE BANK'S TWO PERCENT INFLATION TARGET

"We will do what is necessary in order to achieve that (target) ... Monetary policy is exceptionally accommodative in Canada, it has been for some time. We have a well-functioning financial system. I wouldn't characterize the possibility, the observation of the Bank that in the environment of reduced economic slack and slightly firmer underlying inflation, the possibility that it may become necessary that some of the considerable monetary policy stimulus in Canada may need to be withdrawn consistent with achieving the inflation target - I would not characterize that as hitting the consumer with a two-by-four (piece of wood)."

There is too much domestic borrowing in Thailand with too much household debt. The only way to put the bakes on that is to increase interest rates gradually. Tthey cannot do that unless inflation is in the "zone" . So far, Thailand is doing the job on inflation, but has the same problem as the west in regard to getting interest rates up.

[TAWP]

This would result in additional revenue of Bt60 billion for the country

The problem with politicians - seeing the people merely as a revenue-source to extract money from through violence or threat of violence. Just like a common criminal robbing people on the street corner.

[heiwa]

He also suggested that labour-intensive industry should move to neighbouring countries or they would not be able to survive, as technology would replace manpower in the Kingdom.

Ok thats fine...... Just what do they propose to do with the population after technology takes over?

Send them to red villages to fester.

Send them to Phuket to be trained as jet ski repair men. I hear its very lucrative.

[h90]

^ It has seemed to me that the current government has been pursuing inflationary policies since its inception. An astute businessman with foreknowledge of coming inflation could easily position his family's investments in such a way as to profit tremendously from that inflation.

Inflation is not a problem in Thailand. Thailand's inflation is running at about 3% which is on target and better than its neighbors of Vietnam - 14%, China - 3.5% , Cambodia - 5.5% and India of 9.5%.

If there is too much money available to purchase too few goods and services, or demand in the economy is outpacing supply, then one gets inflation. Typically, inflation goes hand in hand with shortages of labour and materials. Thailand does have a growing labour supply issue and with some key materials such as energy. Yet, Thaialnd is able to keep inflation in check. Think about it. As much as some foreigners in this forum wag their fingers on inflation, the fact of the matter is that the Thai economy has room for the transient inflationary impact of a VAT increase. The arguments that a VAT increase would somehow cause raging inflation are false, and in fairness none of the economists and fiscal policy folks opposed to a VAT increase are saying that. It is only the farangs of TVF that make that claim.

Inflation is an important fiscal tool. For example, one of the most respected Bank Governors in the world Mark Carney (he's now chairman of the G-20 Financial Stability Board, which is the 4th pillar of international financial governance and responsible for keeping financial markets and systems stable and solvent) had this to say on his Bank's inflation goals;

ON HITTING THE BANK'S TWO PERCENT INFLATION TARGET

"We will do what is necessary in order to achieve that (target) ... Monetary policy is exceptionally accommodative in Canada, it has been for some time. We have a well-functioning financial system. I wouldn't characterize the possibility, the observation of the Bank that in the environment of reduced economic slack and slightly firmer underlying inflation, the possibility that it may become necessary that some of the considerable monetary policy stimulus in Canada may need to be withdrawn consistent with achieving the inflation target - I would not characterize that as hitting the consumer with a two-by-four (piece of wood)."

There is too much domestic borrowing in Thailand with too much household debt. The only way to put the bakes on that is to increase interest rates gradually. Tthey cannot do that unless inflation is in the "zone" . So far, Thailand is doing the job on inflation, but has the same problem as the west in regard to getting interest rates up.

"Inflation is not a problem in Thailand. Thailand's inflation is running at about 3% which is on target and better than its neighbors of Vietnam - 14%, China - 3.5% , Cambodia - 5.5% and India of 9.5%."

You aren't in Thailand, or???

Ask your supervisor for the real figures, China has somewhere between 7-15 % and Thailand will be around the same.

[Mosha]

Wife has just commented that it's just been on the TV how everything is costing a lot more.