Inheritance tax bill for NCPO's scrutiny

[webfact]

Inheritance tax bill for NCPO's scrutiny



BANGKOK: -- The Revenue Department is to propose to the National Council for Peace and Order that a 10 percent tax should be imposed on inheritance which is worth more than 50 million baht.

A well-informed source said that the proposed inheritance tax was pending the consideration of the Council of State before it is tabled to the National Legislative Assembly for deliberations.

Revenue Department director-general Mr Prasong Poonthanet said Thursday that NCPO chief General Prayuth Chan-ocha had given an instruction that the inheritance tax should not affect the poor and would not affect savings by the people because the tax might discourage people from saving.

He said that the proposed inheritance tax law abide by the following criteria; the tax must be collected from the inheritance and not from the inheritor; there must be only one rate which is 10 percent; the poor must not be affected by the tax.

Meanwhile Mr Kris Jinaveeejarana, director of Fiscal Economics Office, disclosed that revenue collection for the first ten months of the year amounted to 1.67 trillion baht representing a drop of 7.3 percent of 132 billion baht compared to the same period last year.

Revenue collection from the Customs, Revenue and Excise departments dropped 183 billion baht for the first ten months. The Revenue Department’s revenue amounted to 1.35 trillion baht, a drop of 102 billion baht or 7 percent down; Excise Department’s revenue amounted to 324 billion baht, a drop by 16 percent or 6.18 billion baht.

Source: http://englishnews.thaipbs.or.th/inheritance-tax-bill-ncpos-scrutiny/


-- Thai PBS 2014-08-22

[ukrules]

Ten percent is nothing. If you go over the threshold in the UK it's 40%.

The threshold in the UK is also much lower than the proposed 50 Million threshold.

Edited August 21, 2014 by ukrules

[NongKhaiKid]

The people who consider and may pass these bills have a lot of assets to pass on.

[ramrod711]

Inheritance taxes are double taxation, a person works his entire life to provide for his family, pays all taxes on his earnings, and then his estate is taxed again. At least the fifty million baht won't apply to very many rice or rubber farmers.

[worgeordie]

One thing for sure a bill like this would never,ever be passed by

politicians,some of the richest people in Thailand,who only think

of themselves,not the Country.

regards Worgeordie

[chotthee]

Inheritance taxes are double taxation, a person works his entire life to provide for his family, pays all taxes on his earnings, and then his estate is taxed again. At least the fifty million baht won't apply to very many rice or rubber farmers.

Double taxation is double plus good good.

Triple taxation is triple plus good good good.

Let's all chip in for the benefit of the new general PM and country.

You don't want to help Thailand? Are you real Thai people or not?

[timber]

Double taxation?? They didn't pay tax on the first 50 million and you are for avoiding paying tax on what wasn't paid taxes on.

[Pib]

Inheritance taxes are double taxation, a person works his entire life to provide for his family, pays all taxes on his earnings, and then his estate is taxed again. At least the fifty million baht won't apply to very many rice or rubber farmers.

Amen Brother!! And it's actually a tax after death. Taxes follow you right into the grave or urn. Guess that's why the word taxes follows word death in the ol' saying of, "Death and Taxes."

Taxes are a slippery slope...after a new one gets implement then it slowly starts getting increased. All for the betterment of the country (yea, right). Increasing taxes is much more palatable to politicians than reducing spending to balance a budget.

[belg]

the rich are smart & have lawyers & accountants, that will make it simple : every cent they have, goes into (unnamed) company shares, the day of the death, some manipulation and that person just gave away most of the shares to a family member ...

[Thai at Heart]

Ten percent is nothing. If you go over the threshold in the UK it's 40%.

The threshold in the UK is also much lower than the proposed 50 Million threshold.

Well it achieves exactly what the one in the UK doesn't.

It will be a fair amount paid by largely th e rich. 50mn in assets is a large estate and 10% isn't excessive.

Let's see how well the implementation goes.

[Thai at Heart]

Inheritance taxes are double taxation, a person works his entire life to provide for his family, pays all taxes on his earnings, and then his estate is taxed again. At least the fifty million baht won't apply to very many rice or rubber farmers.

Of all the people in Thailand with assets of 50mn, what percentage of them pay their taxes correctly? 5%, 10%?

This is a good law.

[wanderluster]

the law will be written by the same lawyers that will be representing those doing the inheiriting... get paid once to make the law and then get paid a 2nd time for finding the loop-hole in the law

[khunPer]

Even it may be considered as "double taxation" a 10 percent inheritance tax of 50 million baht and up sounds fair enough (in my ears), especially compared to what some other countries charge, and that will not make generation shift in a family owned business impossible or be cause for hiding wealth abroad.

[submaniac]

1. The Estate Tax ("Death Tax") is unpopular in the United States (and other countries) and there have been calls to eliminate it. The main reason is that people already paid tax once to accumulate the wealth, and payment on death is double taxation.

2. Lawyers and accountants already know how to (legally) mitigate against it by making inter vivos transfers or transferring assets to a trust. (Note that this is not tax evasion, which is illegal, but "tax mitigation" which is to use legally allowed exceptions contained int the law).

3. The NCPO and the NLA are not elected officials. It's one thing to pay a tax. If you are from a democratic country, then you voted the legislature in that imposed the tax. (I..E. you're to blame.) But, imposing a tax when the legislature is not elected is not palatable to me. "Taxation without representation." Boston Tea Party. Led to revolutionary war.

[icare999]

very fair and reasonable I hope they dont make same mistake as in UK where its 40% above about 15 million and you can't even buy a decent home

UK IH tax is very unfair and on ly really hits middle class never rich

[Thai at Heart]

1. The Estate Tax ("Death Tax") is unpopular in the United States (and other countries) and there have been calls to eliminate it. The main reason is that people already paid tax once to accumulate the wealth, and payment on death is double taxation.

2. Lawyers and accountants already know how to (legally) mitigate against it by making inter vivos transfers or transferring assets to a trust. (Note that this is not tax evasion, which is illegal, but "tax mitigation" which is to use legally allowed exceptions contained int the law).

3. The NCPO and the NLA are not elected officials. It's one thing to pay a tax. If you are from a democratic country, then you voted the legislature in that imposed the tax. (I..E. you're to blame.) But, imposing a tax when the legislature is not elected is not palatable to me. "Taxation without representation." Boston Tea Party. Led to revolutionary war.

Well, point one doesn't work in Thailand because tax evasion is enormous in Thailand.

So with so much cash being secreted away into assets in Thailand untouched by the tax payer, why not tax it at death.

Tell you what though. When you consider the extraordinary wealth of some of those right at the top of the pile, this 10% figure above 50mn is on paper worth billions.

Lets not get too worried about taxation without representation. There are so few income tax payers in Thailand, there is no representation and largely no taxation.

[nodomino]

Inheritance taxes are double taxation, a person works his entire life to provide for his family, pays all taxes on his earnings, and then his estate is taxed again. At least the fifty million baht won't apply to very many rice or rubber farmers.

Sales taxes are double taxation. So what. The underlying premise of inheritance tax has little to do with raising revenue but everything to do with redistributing or re-circulating wealth. It reflects powerfully on what kind of government one wants. As is proven over and over and over again and best expressed by Louis Brandeis, a US Supreme Court Justice, "We can either have democracy in this country or we can have great wealth concentrated in the hands of the few, but we cannot have both" That is why inheritance tax is an absolute necessity for a democracy and expressly why most country's target the tax to be most onerous on the very wealthy. This is not however the sole function of inheritance taxes in both developed democracy's and aspiring democracy's. The other absolute necessity for a democracy is the preservation of the commons. The commonly held assets of any society must be preserved from becoming the sole private property of accumulated wealth. Instituting a tax on wealth by the current leadership of this country is a marker of serious importance for Thailand.

[Thai at Heart]

Inheritance taxes are double taxation, a person works his entire life to provide for his family, pays all taxes on his earnings, and then his estate is taxed again. At least the fifty million baht won't apply to very many rice or rubber farmers.

Sales taxes are double taxation. So what. The underlying premise of inheritance tax has little to do with raising revenue but everything to do with redistributing or re-circulating wealth. It reflects powerfully on what kind of government one wants. As is proven over and over and over again and best expressed by Louis Brandeis, a US Supreme Court Justice, "We can either have democracy in this country or we can have great wealth concentrated in the hands of the few, but we cannot have both" That is why inheritance tax is an absolute necessity for a democracy and expressly why most country's target the tax to be most onerous on the very wealthy. This is not however the sole function of inheritance taxes in both developed democracy's and aspiring democracy's. The other absolute necessity for a democracy is the preservation of the commons. The commonly held assets of any society must be preserved from becoming the sole private property of accumulated wealth. Instituting a tax on wealth by the current leadership of this country is a marker of serious importance for Thailand.

I absolutely and wholeheartedly agree.

There is so little wealth distribution in Thailand that it has reached unhealthy levels and it needs to be addressed. This is and the land taxes are the first steps.

[nodomino]

1. The Estate Tax ("Death Tax") is unpopular in the United States (and other countries) and there have been calls to eliminate it. The main reason is that people already paid tax once to accumulate the wealth, and payment on death is double taxation.

2. Lawyers and accountants already know how to (legally) mitigate against it by making inter vivos transfers or transferring assets to a trust. (Note that this is not tax evasion, which is illegal, but "tax mitigation" which is to use legally allowed exceptions contained int the law).

3. The NCPO and the NLA are not elected officials. It's one thing to pay a tax. If you are from a democratic country, then you voted the legislature in that imposed the tax. (I..E. you're to blame.) But, imposing a tax when the legislature is not elected is not palatable to me. "Taxation without representation." Boston Tea Party. Led to revolutionary war.

I would like to respectfully disagree. Where do you suppose the "unpopularity' of the estate tax comes from? It isn't from the people who work for a living. In my home state of California it got its big push from the heirs of Julio and Earnest Gallo who were about to become billionaires but felt their bloodline was worth much, much more. They became active in recruiting and lobbying in the state legislature and in Washington. Soon there were Public Relations and clever, evil sounding catch phrases like "Death Tax" which naturally are caught by the ear of the Useful Fools that hover around the rich and powerful as to enhance their own low and pathetic esteem. In general, Family farm estates in America are not taxed until they exceed 2 million NET dollars. that is to say what the farmer holds less the debts of the business. In effect, the overwhelming majority of what we would think of as a true family farm is not taxed at a transference by death. The vast majority of non-farm assets are passed and no tax is paid. At any rate, the tax code itself has been so altered that vast wealth is transferred via trusts and foundations so that the value and use of the wealth remains with the inheritors tax free. As for income tax, Warren Buffet, who supports INCREASED taxation once noted that his secretary pays a higher effective tax rate than he does. As for corporation tax, over 55 per cent of them pay nothing including hugely profitable concerns like General Electric, PG&E, Tenet Healthcare, Consolidated Edison, Duke Energy, Corning, Honeywell International, Mattel, Wells-Fargo, Boeing, Verizon Communications, DuPont....well the list goes on and on but you get the idea. I would have to agree that taxes imposed from a non representative authority is unpalatable, but that issue is not the case here in Thailand in as much as it has never had a representative government. It had its best chance in 2001, pre-Thaksin, but that is water under the dam. Also...The Boston Tea Party was provoked by the King of England who decided to NOT tax the British East India Company which was a subsidiary of the crown and going broke which allowed that company to import tea to the colonies and undersell the private, local purveyors of the product. There is a lot of interesting aspects to the Tea Party and it does show rather dramatically the importance of not only the effect of taxing but the effect of NOT taxing.

[Thai at Heart]

1. The Estate Tax ("Death Tax") is unpopular in the United States (and other countries) and there have been calls to eliminate it. The main reason is that people already paid tax once to accumulate the wealth, and payment on death is double taxation.

2. Lawyers and accountants already know how to (legally) mitigate against it by making inter vivos transfers or transferring assets to a trust. (Note that this is not tax evasion, which is illegal, but "tax mitigation" which is to use legally allowed exceptions contained int the law).

3. The NCPO and the NLA are not elected officials. It's one thing to pay a tax. If you are from a democratic country, then you voted the legislature in that imposed the tax. (I..E. you're to blame.) But, imposing a tax when the legislature is not elected is not palatable to me. "Taxation without representation." Boston Tea Party. Led to revolutionary war.

I would like to respectfully disagree. Where do you suppose the "unpopularity' of the estate tax comes from? It isn't from the people who work for a living. In my home state of California it got its big push from the heirs of Julio and Earnest Gallo who were about to become billionaires but felt their bloodline was worth much, much more. They became active in recruiting and lobbying in the state legislature and in Washington. Soon there were Public Relations and clever, evil sounding catch phrases like "Death Tax" which naturally are caught by the ear of the Useful Fools that hover around the rich and powerful as to enhance their own low and pathetic esteem. In general, Family farm estates in America are not taxed until they exceed 2 million NET dollars. that is to say what the farmer holds less the debts of the business. In effect, the overwhelming majority of what we would think of as a true family farm is not taxed at a transference by death. The vast majority of non-farm assets are passed and no tax is paid. At any rate, the tax code itself has been so altered that vast wealth is transferred via trusts and foundations so that the value and use of the wealth remains with the inheritors tax free. As for income tax, Warren Buffet, who supports INCREASED taxation once noted that his secretary pays a higher effective tax rate than he does. As for corporation tax, over 55 per cent of them pay nothing including hugely profitable concerns like General Electric, PG&E, Tenet Healthcare, Consolidated Edison, Duke Energy, Corning, Honeywell International, Mattel, Wells-Fargo, Boeing, Verizon Communications, DuPont....well the list goes on and on but you get the idea. I would have to agree that taxes imposed from a non representative authority is unpalatable, but that issue is not the case here in Thailand in as much as it has never had a representative government. It had its best chance in 2001, pre-Thaksin, but that is water under the dam. Also...The Boston Tea Party was provoked by the King of England who decided to NOT tax the British East India Company which was a subsidiary of the crown and going broke which allowed that company to import tea to the colonies and undersell the private, local purveyors of the product. There is a lot of interesting aspects to the Tea Party and it does show rather dramatically the importance of not only the effect of taxing but the effect of NOT taxing.

I agree 100% about the taxation of corporations. The use of offshore havens by companies and transfer pricing has hollowed the tax take to the bone in the USA. Then add up the consecutive tax cuts given to people and is it any wonder that there is a monstrous deficit in the USA. As for inheritance taxes, it is a thorny issue, but as you say, its rarely the man on the street moaning about it, so there should be a level of inheritance tax to tax untaxed capital appreciation, which normally falls on property or house appreciation.

[bangrak]

When it must be, let them at least NOT exclude the foreign assets and properties, all the opposite in fact, as the money used to acquire these has for sure never contributed to the well-being of the Thai population, and most of it might well have 'escaped' out of the country without any taxation!

[Time Traveller]

The NCPO and the NLA are not elected officials. It's one thing to pay a tax. If you are from a democratic country, then you voted the legislature in that imposed the tax.

That's right they are not. This is Thailand. However, according to many surveys a majority of middle and higher income Thais (the people affected by this) are very supportive of the coup and the military, so they got what they wanted.

If it's a problem move your money abroad

Edited August 22, 2014 by Time Traveller

[nodomino]

When we speak here on this forum and some refer to the representation presumably of the Thai citizens, it is important to remember that 1/2 of the Senate was appointed.

[Arkady]

Ten percent is nothing. If you go over the threshold in the UK it's 40%.

The threshold in the UK is also much lower than the proposed 50 Million threshold.

You can be sure that the Revenue Department will try to increase the tax and lower the threshhold in future. This is just the thin end of the wedge. The tax will be very good for them. They will need to add a lot of staff and buildings etc to collect this tax which is known to be quite complex and expensive to collect, vs PAYE salaries tax and VAT. There will also be huge opportunities to extort bribes from heirs.

[Dogmatix]

very fair and reasonable I hope they dont make same mistake as in UK where its 40% above about 15 million and you can't even buy a decent home

UK IH tax is very unfair and on ly really hits middle class never rich

In the UK it really hits the middle classes and disproportionately hits those in the Southeast. Due to high house prices they are more likely to be over the threshhold.

[manarak]

they should not make an inheritance tax, they should tax wealth.

[puck2]

1. The Estate Tax ("Death Tax") is unpopular in the United States (and other countries) and there have been calls to eliminate it. The main reason is that people already paid tax once to accumulate the wealth, and payment on death is double taxation.

2. Lawyers and accountants already know how to (legally) mitigate against it by making inter vivos transfers or transferring assets to a trust. (Note that this is not tax evasion, which is illegal, but "tax mitigation" which is to use legally allowed exceptions contained int the law).

..................

Who told you the fairy tale that inheritance taxation is a double taxation?

The person who inherits the fortune of 50 million Baht or more didn't pay any tax penny, cent or satang. This person has the luck of receiving a giant fortune for doing nothing. Only belonging to a rich family is the qualification for this heritage in general.

Of course, some people deserve an heritage, but some not. Among the last there are people who only know how to spend the money of mother or father and are not used or too stupid to work for it. Just in Thailand there are many examples for this type of inheritors.

Another idea for an heritage tax is unequal distribution of wealth. Let the super rich pay for what they didn't earn only by themselves. Or do you think that Bill Gates, Steve Jobs, Mintal, Cavendish, Reuben, Arnault, Rothschild and all the other riches worked alone to get such a wealth? Did someone near to the new skytrain work very hard when the value of his estate suddenly had a x- or xx-fold value? The inheritors deserve the tax because the traffic investment of the state made it so valuable. The owner of such an estate did nothing for the elevated value! Did he/she pay tax for this undeserved value? NO.

In Germany the inheritance tax includes gifts of a certain value during one's life with low amounts of exemptions. Tax evasion is not so easy. There are different tax allowances depending on the relationship to the donor, but much lower than that of the new Thai government.

Edited August 22, 2014 by puck2

[manarak]

1. The Estate Tax ("Death Tax") is unpopular in the United States (and other countries) and there have been calls to eliminate it. The main reason is that people already paid tax once to accumulate the wealth, and payment on death is double taxation.

2. Lawyers and accountants already know how to (legally) mitigate against it by making inter vivos transfers or transferring assets to a trust. (Note that this is not tax evasion, which is illegal, but "tax mitigation" which is to use legally allowed exceptions contained int the law).

..................

Who told you the fairy tale that inheritance taxation is a double taxation?

The person who inherits the fortune of 50 million Baht or more didn't pay any tax penny, cent or satang. This person has the luck of receiving a giant fortune for doing nothing. Only belonging to a rich family is the qualification for this heritage in general.

Of course, some people deserve an heritage, but some not. Among the last there are people who only know how to spend the money of mother or father and are not used or too stupid to work for it. Just in Thailand there are many examples for this type of inheritors.

Another idea for an heritage tax is unequal distribution of wealth. Let the super rich pay for what they didn't earn only by themselves. Or do you think that Bill Gates, Steve Jobs, Mintal, Cavendish, Reuben, Arnault, Rothschild and all the other riches worked alone to get such a wealth? Did someone near to the new skytrain work very hard when the value of his estate suddenly had a x- or xx-fold value? The inheritors deserve the tax because the traffic investment of the state made it so valuable. The owner of such an estate did nothing for the elevated value! Did he/she pay tax for this undeserved value? NO.

In Germany the inheritance tax includes gifts of a certain value during one's life with low amounts of exemptions. Tax evasion is not so easy. There are different tax allowances depending on the relationship to the donor, but much lower than that of the new Thai government.

Taking into consideration what people deserve, or how much workforce they used for taxation, is simply so wrong.

The state should not care about citizens' morality as long as citizens remain within legal boundaries.

[puck2]

manarak said

< - >

Taking into consideration what people deserve, or how much workforce they used for taxation, is simply so wrong.

The state should not care about citizens' morality as long as citizens remain within legal boundaries.

Taxing wealth or taxing inheritance, that's not fundamentally different. The most important aspect should be reducing the wealth gap at least a little bit. It'snot a question of morality, it's a question of fairness and justness. Example? The rich would never be so rich, if they had to pay the real share of their profit to their co workers and for the state support.

I agree with you that taxing the rich is not a question of moral (as all taxing). But it's a a very legitim task for the state to reclaim money what helped to make them rich at state's/community's cost. A few of many examples: money for education, for constructing streets (especially for the big companies), in general for building an infrastructure, for establishing public safety by the police etc.

BTW, I guess the budget would nearly explode, if the new government would tax corruption money and fining both sides of illegal deals. But that requires cleaning the executive at all levels of the state departments, a task for Heracles. Undoubtedly a task of justice.

[Thai at Heart]

very fair and reasonable I hope they dont make same mistake as in UK where its 40% above about 15 million and you can't even buy a decent home

UK IH tax is very unfair and on ly really hits middle class never rich

In the UK it really hits the middle classes and disproportionately hits those in the Southeast. Due to high house prices they are more likely to be over the threshhold.

Last year, one estate in 12 paid inheritance tax in the UK.

People make provision and avoid it which is acceptable. 1/12 as a tax on the wealthiest is about proportionate.