Why Are We Cutting Tax For The Most Wealthy People?: Thai Editorial

[geriatrickid]

How many percentage of population in Singapore/Malaysia actually pay tax, i think its a lot higher than Thailand

A very valid point.

Buried in the discussion of he change in tax policy was the statement that the government was putting more effort into tax audits and compliance. This is probably the most effective tax strategy: Compliance. Hopefully, they carry through on the intent.

[Arkady]

Tax cuts for everyone. Not clear who is going to pay for this govt's massive populist and investment schemes that all riddled with corruption.

The personal income tax cuts are OK and not very deep anyway. The problem is that their is no property tax and corporate tax is not properly collected. The Revenue Dept is easily bribed to allow business owners to claim ludicrous personal expenses as business expenses. Thailand's tax collection as a % of GDP is far too low and it will eventually run into a brick wall like Greece.

On the expenditures side, apart from the populist schemes and white elephant infrastructure investment the country spends far too much on defence which is not needed. It is not necessary to have 600 generals promoted based solely on seniority and connections, an aircraft carrier, submarines or airships or to buy substandard junk from China or Eastern Europe based solely on the kickbacks it generates. Defence could be cut by two thirds and with streamlining of the military would be in better shape as a result. The spend on education needs to be doubled or tripled. It is extremely low compared to developed countries which what Thailand aspires to be but the problem is of course that better educated peasants would no longer vote for any the charlatans currently in politics.

[chrisrazz]

non-working expats pay taxes ? no ? yes ?

15% of every satang that i earn true bank fix deposit interests are taking away and that amounts in much more money than the everage thai person pays in taxes let stand social security, but i am not entitled to any social security ?

So you only pay 15% on unearned income in fixed termed deposits, therefore you have assets. Then you believe you should be entitled to social security. I really hope you are joking!

[geriatrickid]

non-working expats pay taxes ? no ? yes ?

15% of every satang that i earn true bank fix deposit interests are taking away and that amounts in much more money than the everage thai person pays in taxes let stand social security, but i am not entitled to any social security ?

If you are generating income then yes, there will be witholding tax. You would have to pay this to your homeland if you retained residence there. The IRS witholds tax on my former employer's stock purchase plan dividends, even though I am not a US national. They have a tax treaty with my homeland, just like Thailand does, and I report the witholding against my income and receive a tax credit.

Here's a nice little tax booklet from PWC

http://www.pwc.com/en_TH/th/tax/assets/2012/thai-tax-2012-booklet.pdf

[F4UCorsair]

I think the important figure in all this is;

"In Thailand, only a very small number of people - about two million people - actually pay personal income tax"

That may be the case, so they need to broaden the base, pull more wage and salary earners into the net, not tax the existing tax payers more. The consequence of taxing high income earners more is that they start conducting businesses offshore through tax havens, where possible, and then there is even less money coming from them. Governments don't get rich by taxing high salary earners more because there just aren't enough high salary earners to make a significant difference.

The only thing that taxing the rich achieves is appeasing the losers who think it their right to sit on their butts and get money for nothing (I refer to here in Australia), or pay less tax because they want the rich to pay their way (many countries with less developed social security systems). It's more than unfortunate that there are enough losers to affect the outcome of an election, but not enough high income earners to do so.

[caughtintheact]

Usually I see complaints here about the government wasting money they get from income taxes, and now I am seeing complaints when the government wants to take less money in income taxes to waste.

Then I see that many seem to think that income tax is the only tax. But what about VAT? What about inflation (inflation is a tax, which even the poor pay)? What about government policies and legislation that cause prices to increase like the minimum wage law (which also causes unemployment and the poor and unskilled pay this tax as well)?These are taxes, no matter what they are called.

No one seems to talk about what the "rich" will do with that extra 5% of their own money that the government has decided not to legally steal. Does anyone think the rich might just add it to their portfolio of projects and companies that create wealth and employ people? Or will they just put it in their fat bank accounts that allow the banks to invest in businesses that create wealth and provide employment? Or will the rich just keep that 5% in their pockets the rest of their lives and not use it at all? If they did that with all their money, I would not object if the government took all their money, because governments might waste only 90% instead of 100%, and money not used in any way is wasted.

[MobileContent]

http://www.nationmul...n-30196687.html

Contradict yourself much The Nation?

But actually it makes sense since the yellow shirt mouth piece that is The Nation will say anything and it's opposite to find an angle of attack, hoping something will stick.

Well said. What a rubbish paper.

[aguy30]

Net Income (Baht) Rate (%)

0 – 150,000 - 0 %

150,000 – 500,000 - 10%

500,000 – 1,000,000- 20%

1,000,000 – 4,000,000 -30%

4,000,000 – up - 37%

Is the tax rate bracket stepped so that the first 150k is not taxed and then the next 150k to 500k is taxed @ 10% and so on?

IE: for 2 million baht income

first 150k is 0 tax

the next 350k @10% = 35K tax

500k @ 20% = 100k tax

the next 1 million baht @ 30% = 300k tax

Total tax = 435K baht due

or is it 2 million baht @ a flat 30% = 600k baht tax?

[thaicbr]

Net Income (Baht) Rate (%)

0 – 150,000 - 0 %

150,000 – 500,000 - 10%

500,000 – 1,000,000- 20%

1,000,000 – 4,000,000 -30%

4,000,000 – up - 37%

Is the tax rate bracket stepped so that the first 150k is not taxed and then the next 150k to 500k is taxed @ 10% and so on?

IE: for 2 million baht income

first 150k is 0 tax

the next 350k @10% = 35K tax

500k @ 20% = 100k tax

the next 1 million baht @ 30% = 300k tax

Total tax = 435K baht due

or is it 2 million baht @ a flat 30% = 600k baht tax?

I believe your 1st scenario to be correct.

sent from my Q6

[RachaRob]

Taxes are mostly used for governments to buy votes and spend on pet projects and line their pockets and the rest they just seem to waste.

People who work hard get taxed more? well thats an incentive! France raised their RICH tax to 75% on millionaires so now they are all moving out so no money from them for govt over expenidture. Should have a flat rate tax and a consumption tax that everyone will pay.

[OzMick]

This thread is an embarrassment, because the Nation in its business section criticizes the government for not cutting the taxes more. So which is it?

The tax rate on those to receive some relief was already high. The adjustment is intended to bring some fairness back.

It seems some people using the adjustment to attack the government most likely are not paying income tax in the segments pegged for relief, otherwise they would know that the segments were overtaxed. For reference sake;

Net Income (Baht) Rate (%)

0 – 150,000 - 0 %

150,000 – 500,000 - 10%

500,000 – 1,000,000- 20%

1,000,000 – 4,000,000 -30%

4,000,000 – up - 37%

The Nation's business section makes some valid points;

http://www.nationmul...n-30196687.html

- a steeper cut is necessary if the Kingdom wants to raise its profile among foreign investors, who are being wooed by countries with lower tax rates.

- this is the first major change in 20 years.

-compared to Singapore and Malaysia - the two Asean members who offer comparative levels of infrastructure and skilled labour as Thailand - this rate is still high. Singapore's highest tax rate is 20 per cent, while Malaysia is 26 per cent. Regionally, Thailand's top personal income tax rate is the highest, even when compared to Vietnam, which charges 35 per cent and Indonesia, which has fixed its rate at 30 per cent.

- cutting taxes would be one of the first steps Thailand would have to take in order to avoid brain drain and attract newcomers.

- Under the new tax structure in Thailand, those with a net taxable income of above Bt4 million are subjected to the highest rate of 35 per cent. In comparison, expats working in Singapore pay 15 per cent if they have taxable income of no more than S$160,000 or Bt4.06 million. The highest rate of 20 per cent is slapped on those with taxable income of more than Bt8.1 million. In Malaysia, only those with taxable income of more than 100,000 ringgit or Bt10 million are subjected to the highest rate of 26 per cent.

100,000 ringit or Bt10 million? If you are willing to exchange B100 for 1 ringit, then I will happily sell you a few million ringit at that rate.

[risky11]

What a Communist article. Openly claiming the redistribution of wealth is good and "social justice" is too. The right to keep the fruits of one's own labor is the foundation of Freedom and Justice. Taxes are theft. Forcing productive, creative or even lucky people to fork over their belongings to the poor is morally and ethically wrong. If some rich people got that way through theft or fraud, prosecute them - like you did Thaksin. Seize their ill-gotten welathy. But you need to leave honest, hard-working people alone to enjoy their wealth in peace. Otherwise, they will flee to freer places and Thailand will become much poorer. Stop the Communist class warfare....

[thaicbr]

What a Communist article. Openly claiming the redistribution of wealth is good and "social justice" is too. The right to keep the fruits of one's own labor is the foundation of Freedom and Justice. Taxes are theft. Forcing productive, creative or even lucky people to fork over their belongings to the poor is morally and ethically wrong. If some rich people got that way through theft or fraud, prosecute them - like you did Thaksin. Seize their ill-gotten welathy. But you need to leave honest, hard-working people alone to enjoy their wealth in peace. Otherwise, they will flee to freer places and Thailand will become much poorer. Stop the Communist class warfare....

Taxes are not theft. Excessive taxation is. There is a difference.

personally I think everyone should pay the same flat rate with no discounts etc.

sent from my Q6

[EvilDrSomkid]

Net Income (Baht) Rate (%)

0 – 150,000 - 0 %

150,000 – 500,000 - 10%

500,000 – 1,000,000- 20%

1,000,000 – 4,000,000 -30%

4,000,000 – up - 37%

Is the tax rate bracket stepped so that the first 150k is not taxed and then the next 150k to 500k is taxed @ 10% and so on?

IE: for 2 million baht income

first 150k is 0 tax

the next 350k @10% = 35K tax

500k @ 20% = 100k tax

the next 1 million baht @ 30% = 300k tax

Total tax = 435K baht due

or is it 2 million baht @ a flat 30% = 600k baht tax?

Those are the old tax rates.

The new ones from next year are more stepped. Check my older post with the new rates.

[aguy30]

The point of my question is how is the rate is applied, not at exactly what rate?

Is it one flat rate based on and for the total income or is it stepped with different rates to give a cumulative total tax?

BTW you could have just posted the correct rates instead making search for your "older post".

Edited December 24, 2012 by aguy30

[QED]

The point of my question is how is the rate is applied, not at exactly what rate?

Is it one flat rate based on and for the total income or is it stepped with different rates to give a cumulative total tax?

BTW you could have just posted the correct rates instead making search for your "older post".

It is stepped with different rates for each slice of income.

I am yet to see the new rates, could not find them on the government website, maybe the previous poster would be good enough to re-post them?

[aguy30]

http://americanexpatchiangmai.com/thailand-starts-the-new-year-with-a-tax-reduction/

[aguy30]

Across the board tax reductions!

How's that going to work?

Here are just a few of the upcoming needs,projects and costs.

Rice mortgaging deal is set to loose lots of baht.

New Bangkok mass transit systems planned between now and 2022 need to be financed.

New high speed rail system for 2016, or 2018 or whenever it gets completed.

Upgrade the SRT rail system from its early 20th century status.

Expand Suvarnabhumi.

Flood prevention programs and cures for Bangkok continually sinking.

Maintain existing infrastructure like highways.

Need for more clean water reservoirs.

Need for new and improved waste sanitation systems.

Need for new electric power producing facilities and distribution.

[QED]

http://americanexpat...-tax-reduction/

Thanks.

So the max someone could save is 70K, plus 2% on anything over 4M. Better than a kick in the nuts, thank you Mr Thai Taxman!

The tax burden on the average expat is excessive here, when you consider what you actually get for it (bugger all!), so every little helps.

[EarthAlien]

Not sure if this was thought of by the Thai Tax office but there has been argument in other countries that by lowering income tax for the wealthy it actually can raise revenue because the elite will choose to pay the tax rather than spend fortunes and all the time and effort to set up tax avoidance schemes.

[Potosi]

What a Communist article. Openly claiming the redistribution of wealth is good and "social justice" is too. The right to keep the fruits of one's own labor is the foundation of Freedom and Justice. Taxes are theft. Forcing productive, creative or even lucky people to fork over their belongings to the poor is morally and ethically wrong. If some rich people got that way through theft or fraud, prosecute them - like you did Thaksin. Seize their ill-gotten welathy. But you need to leave honest, hard-working people alone to enjoy their wealth in peace. Otherwise, they will flee to freer places and Thailand will become much poorer. Stop the Communist class warfare....

Are you some kind of Nazi, because they said the same thing?

[Rich teacher]

Pheu Thai. The party allegedly "helping" the poor.

The real name should be Pheu Thai Ruay (เพื่อไทยรวย)

But that would mean for the purpose of making Thailand rich

[rsokolowski]

This is a difficult concept for many people to grasp, but corporations do not pay taxes. The people that buy their products or services end up paying more so that the company can produce it's product/service plus the tax.

Tax the companies more and one of two things will happen, the price of the product will increase, or the company will find a way to make the product/service for less money (i.e. fire employees). At some point the company may decide that it is better to produce the product somewhere else, and move the entire operation somewhere more profitable.

"tax the rich til there are no rich no more"

[rsokolowski]

http://www.nationmul...n-30196687.html

Contradict yourself much The Nation?

But actually it makes sense since the yellow shirt mouth piece that is The Nation will say anything and it's opposite to find an angle of attack, hoping something will stick.

Regardless, how about trying to address the points in this article? It is amusing to watch people who once loudly proclaim their support for common people and social programs for the poor justify tax cuts for the rich and the further crippling of a tax system that is already toothless and unable to properly collect revenue.

So the way to fix a broken tax system is to raise the tax rate on the rich (those most able to hire a proper CPA and legally minimize their tax liability). The same system that you say is "toothless and unable to properly collect revenue" at the current rates.

Maybe, just maybe it the tax rates were not confiscatory it would be easier (and cheaper) for the wealthy to just pay the tax rather than hiring tax lawyers and CPA's (which are expensive, but are a lot cheaper than 37% of your income) to legally avoid the taxman.

Higher tax rates only equate to more revenue on paper, when put into practice tax revenues normally decrease. I would be willing to bet that France's new 75% tax rate on the wealthy will not result in a corresponding increase in revenue.

It is a puzzling phenomenon, but for some strange reason people seem to have a desire to keep the money that they have earned.

[F4UCorsair]

What a Communist article. Openly claiming the redistribution of wealth is good and "social justice" is too. The right to keep the fruits of one's own labor is the foundation of Freedom and Justice. Taxes are theft. Forcing productive, creative or even lucky people to fork over their belongings to the poor is morally and ethically wrong. If some rich people got that way through theft or fraud, prosecute them - like you did Thaksin. Seize their ill-gotten welathy. But you need to leave honest, hard-working people alone to enjoy their wealth in peace. Otherwise, they will flee to freer places and Thailand will become much poorer. Stop the Communist class warfare....

Taxes are not theft. Excessive taxation is. There is a difference.

personally I think everyone should pay the same flat rate with no discounts etc.

sent from my Q6

That's common sense. Hong Kong residents pay a flat rate, no exceptions or deductions, and it's 15%, paid in arrears (may have changed since I lived there). Nobody even thinks it's worth trying to avoid.

If governments penalize those who have generated huge wealth, those very people will take extreme measures to avoid paying any, resulting in less for the government, not more, and many wealthy people are philanthropists thereby taking the heat of governments' funding of services.

Edited December 24, 2012 by F4UCorsair

[F4UCorsair]

rsolokowski said,""tax the rich til there are no rich no more

I made that very point to a socialist friend (Greens voter) recently. He was saying that Australia's richest person, Gina Reinhart, worth about $9 Billion, and accumulating about $600,000 a day, should have all her wealth taken from her and redistributed to the poor. The point I made was that he may well become the new poor because those benefiting from the redistribution could pass him financially.

Governments will never make the poor rich by taking from the rich and giving to the poor. The distribution of wealth is as it is for a reason. There are doers and watchers in this world, and take from a doer and give to a watcher, and all that will be achieved is that the doer will be financially worse off for a short while until he generates wealth again. The watcher will squander the money given to him and be expecting more.

Edited December 24, 2012 by F4UCorsair

[F4UCorsair]

Taxes are mostly used for governments to buy votes and spend on pet projects and line their pockets and the rest they just seem to waste.

People who work hard get taxed more? well thats an incentive! France raised their RICH tax to 75% on millionaires so now they are all moving out so no money from them for govt over expenidture. Should have a flat rate tax and a consumption tax that everyone will pay.

That's exactly how it should be!! The wealthy still pay more because they earn more and consume more, but it's a way fairer system than increasing the income tax.

Of course, taxation is not about being fair. For socialists governments, like the losers we currently have in Australia, it's about taking form the rich and giving to the poor to buy the poor's votes, but even the poor are awake to that. How unfair is that? The socialist government gives to them and they vote conservative!!!

[angsta]

The Nation as a newspaper has zero credibility in my eyes.

I think exactly the same about this government

They won the election, again. In fact they will win every election until the military get involved. It's like those American states that claim to want independence because they don't like being told to do by a black man. .

And she's fit, what's not to like??