Thai inheritance tax bill sails through the first reading

[webfact]

Inheritance tax bill sails through the first reading



BANGKOK: -- The National Legislative Assembly today (Thursday) passed the first reading of the inheritance tax bill by 172 votes in favour of the bill against eight with seven abstentions.

The bill was presented to the assembly by Finance Minister Sommai Phasi and then it was open to debate by members of the NLA.

The minister said that the bill was intended to create social fairness because previously people who inherited assets from their parents were not required to pay inheritance tax which was regarded as unfair. In the mean time, he said that the government did not want to put too much burden on the inheritors either by imposing a modest tax rate at 10 percent for the inherited assets beyond 50 million baht.

He pointed out that in developed countries, tax revenues amounted to 30-40 percent of GDP whereas in Thailand, the revenues accounted for only 18 percent of GDP.

During the debate, most NLA members voiced their opinions in support of the bill. One of the assemblymen, Dr Jate Srithanont said he doubted the imposition of inheritance tax would help reduce social disparity. He also wondered why tax was not imposed on the heritage itself which should bring in more revenue for the state.

However, Mr Prasong Poonthanet said imposing inheritance tax would be fairer and and would bring in more revenue for the state than imposing tax on the heritage itself.

Source: http://englishnews.thaipbs.or.th/inheritance-tax-bill-sails-first-reading


-- Thai PBS 2014-12-18

[JOC]

Since there is no opposition, what a surprise!!

[JOC]

>>He pointed out that in developed countries, tax revenues amounted to 30-40 percent of GDP whereas in Thailand, the revenues accounted for only 18 percent of GDP.<< Quote

The main words being developed countries

Like in countries where everyone have access to free quality education, good healthcare and driveable roads.

For what Thailand is delivering, even 18% seems way too high!!

[baboon]

Since there is no opposition, what a surprise!!

Quite. What a bloody farce, making out like there is some kind of debate, some kind of legitimacy to this rubber stamp assembly.

An absolute insult to the intelligence.

[kotsak]

I am surprised that they had to vote..A circus for show only..

[gemini81]

And apply the general rule of thumb in politics- if you're putting the law into effect, make you sure you get your personal inheritance first, so you won't have to be taxed.

[jdinasia]

And apply the general rule of thumb in politics- if you're putting the law into effect, make you sure you get your personal inheritance first, so you won't have to be taxed.

Hubby's family is sorting everything out already.

The 10% on inheritance over 50 million doesn't seem unreasonable, but it does explain why some of Thailand's power players have had more cash to invest recently in advance of this.

[jayceenik]

What if a TGF inherits from a non-resident farang boyfriend assets over 50M located outside Thailand and not taxed there (like in Singapore) ?

Would she have to declare the inheritance and pay the 10% tax over the 50M ?

[Commerce]

What if a TGF inherits from a non-resident farang boyfriend assets over 50M located outside Thailand and not taxed there (like in Singapore) ?

Would she have to declare the inheritance and pay the 10% tax over the 50M ?

Don't worry Jay, I'll marry you tomorrow and we can keep it off-shore - no percentage paid (2% in assurities would aid me).

[Thai at Heart]

This is such a bad way to run a country.

[nong38]

So they passed avote, had a chat about rates but did I miss something what is the proposed rate 18% for people with over 50 million? What about ordinary people or are people with under 50 million exempt? Everyone with under 50 million raise your hands.

[whybother]

And apply the general rule of thumb in politics- if you're putting the law into effect, make you sure you get your personal inheritance first, so you won't have to be taxed.

It's always good to have your crystal balls working well so you can know to get your inheritance 18 months before the law is even talked about.

[whybother]

So they passed avote, had a chat about rates but did I miss something what is the proposed rate 18% for people with over 50 million? What about ordinary people or are people with under 50 million exempt? Everyone with under 50 million raise your hands.

It's usually good to read past the first line:

the government did not want to put too much burden on the inheritors either by imposing a modest tax rate at 10 percent for the inherited assets beyond 50 million baht.

[losworld]

This is a great bill for the people of Thailand and one that so many western govts do not have the balls to deliver.

[EyesWideOpen]

It is a cruel and senseless tax . Whatever the estate is, it should have been taxed while it

was being accumulated. So let's say for example you worked your entire life and

earned 1 million dollars. All the time you were earning it, you were being taxed on it.

So say you end up with 700,000 dollars. Now you suddenly die. Then the government

steps in and taxes the money again as an estate, which makes no sense at all. Why

should the government be allowed to tax the money twice ????

Regarding the " modest" 10 % , all taxes start small before they are slowly ramped up

later.....

Edited December 18, 2014 by EyesWideOpen

[icare999]

It is a cruel and senseless tax . Whatever the estate is, it should have been taxed while it

was being accumulated. So let's say for example you worked your entire life and

earned 1 million dollars. All the time you were earning it, you were being taxed on it.

So say you end up with 700,000 dollars. Now you suddenly die. Then the government

steps in and taxes the money again as an estate, which makes no sense at all. Why

should the government be allowed to tax the money twice ????

Regarding the " modest" 10 % , all taxes start small before they are slowly ramped up

later.....

well go live in UK 40% on anything over around 15 million baht and if married to a Thai not living in UK no extra allowance for your wife who will be left with kids. Thats why i moved most of our asserts out of UK. 10% over 50 million is extremely fair and why posters should be against it is beyond me if they care for the poor. Im more than happy to pay 10% on assets over 50 million if I had 50 million left but in UK 40% over 15 million leaving my wife and kids lacking money for school fees etc let alone a reasonable lifestyle after a lifetime working my @#$# off and paying over 25 million baht in tax to UK. Now harder times come the UK even freeze my pathetic UK pension and are talking about not allowing my personal allowance. Stop knocking Thailand its government and i my wife and many this friends had had enough of thieving scum of last government.

[tonbridgebrit]

I think this inheritance tax is a great idea.

"One of the assemblymen, Dr Jate Srithanont said he doubted the imposition of inheritance tax would help reduce social disparity. He also wondered why tax was not imposed on the heritage itself which should bring in more revenue for the state."

Well, I think the man is correct. Yes, if "imposing it on the heritage itself, it should bring in more revenue for the state", well, in that case, do it. Anything that brings in more revenue for the state is good. How about doing it on assets above 25 million baht, and not 50 million baht. When does inheritance tax start in England ? What about America and Australia ?

And once the law is brought in, do eveything possible to close the loopholes. Go on, junta, do this, most people in Thailand will love you for this. Who are the Thais who are going to NOT like this ? How many Thais have got tens of millions of baht ? Those people only make up a small percentage of the electorate, who cares if they are not going to vote for you ??

[webfact]

INHERITANCE TAX
NLA approves first reading of inheritance tax bill
Prapan Chindalertudomdee
The Nation

Sommai Phasee

BANGKOK: -- The National Legislative Assembly (NLA) yesterday approved in principle the inheritance tax bill and another bill to amend the Revenue and Taxation Code.

Finance Minister Sommai Phasee said that in Thailand, tax revenue equated to 18 per cent of gross domestic product, while in developed countries it was more like 30-40 per cent of GDP. The levy of 10 per cent on estates above the Bt50-million threshold will raise tax revenue to 21-22 per cent of GDP, he claimed.

However, some NLA members argued against the tax.

Pradit Wannarat noted that 12 of the 25 countries that had adopted an inheritance tax had since abolished it, such as Canada, Australia, New Zealand and Norway, since it was not worth collecting.

Thailand's rate of 10 per cent would be the fifth-highest in the world. Pradit questioned whether the inheritance levy would be a form of double taxation, as the recipients had already been subject to either individual or corporate income tax.

Other options to raise tax revenue should also be considered such as hiking the excise on liquor or cigarettes, he said.

Kosol Petchsuwan said Thailand should make sure it could prevent the inheritance-tax avoidance many countries had experienced. He added that the inheritance tax might prompt the wealthy to transfer assets to other countries where there are no such taxes.

Beneficiaries who are young might find it difficult to pay the tax, he said.

Somchai Swangkarn said other related bills should also be expedited for NLA vetting to ensure that taxes could be used to reduce income inequality, such as the real-estate-tax bill.

Jet Sirataranont said he was concerned that the inheritance tax might not be able to achieve the government's goal of bridging the income divide, since there are some ways to avoid this tax.

Sommai said the tax should be levied at a fixed rate instead of a sliding basis, as it is aimed at high-income people, not middle-income people.

He added that many of the countries that had cancelled this type of tax already had an efficient income-distribution system in place, he said.

The NLA voted 160-16 in favour in the first reading of the inheritance-tax bill, with 10 abstentions. It also voted 172-8 for a bill to amend the Revenue and Taxation Code. Seven declined to vote.

Source: http://www.nationmultimedia.com/business/NLA-approves-first-reading-of-inheritance-tax-bill-30250170.html


-- The Nation 2014-12-19

[Ricardo]

Since there is no opposition, what a surprise!!

Quite. What a bloody farce, making out like there is some kind of debate, some kind of legitimacy to this rubber stamp assembly.

An absolute insult to the intelligence.

On the other hand, I find it interesting that a government which its detractors claim to be running things in the interests of the elite, should contemplate or pass such a thing as an Inheritance Tax, however low or watered-down ?

This measure has been needed for some time now, but nobody could raise the support to actually pass it, when democratically-elected ?

[EyesWideOpen]

It is a cruel and senseless tax . Whatever the estate is, it should have been taxed while it

was being accumulated. So let's say for example you worked your entire life and

earned 1 million dollars. All the time you were earning it, you were being taxed on it.

So say you end up with 700,000 dollars. Now you suddenly die. Then the government

steps in and taxes the money again as an estate, which makes no sense at all. Why

should the government be allowed to tax the money twice ????

Regarding the " modest" 10 % , all taxes start small before they are slowly ramped up

later.....

well go live in UK 40% on anything over around 15 million baht and if married to a Thai not living in UK no extra allowance for your wife who will be left with kids. Thats why i moved most of our asserts out of UK. 10% over 50 million is extremely fair and why posters should be against it is beyond me if they care for the poor. Im more than happy to pay 10% on assets over 50 million if I had 50 million left but in UK 40% over 15 million leaving my wife and kids lacking money for school fees etc let alone a reasonable lifestyle after a lifetime working my @#$# off and paying over 25 million baht in tax to UK. Now harder times come the UK even freeze my pathetic UK pension and are talking about not allowing my personal allowance. Stop knocking Thailand its government and i my wife and many this friends had had enough of thieving scum of last government.

Reread my post, I was not knocking Thailand. My simple concept was that if you work all your life, you should be taxed along the way. Now whatever money you saved up AFTER being taxed,after your death, is now taxed again when it is passed to your heirs... And yes UK has high taxes, but also has a social safety net. Thailand has NO safety net .... And regarding thieving scum governments, if you did a bit of research, you would realize that every Thai government is no more than pigs at the feeding trough. Thaksin just ramped it up a bit more and basically institutionalized corruption.

[whybother]

I think this inheritance tax is a great idea.

"One of the assemblymen, Dr Jate Srithanont said he doubted the imposition of inheritance tax would help reduce social disparity. He also wondered why tax was not imposed on the heritage itself which should bring in more revenue for the state."

Well, I think the man is correct. Yes, if "imposing it on the heritage itself, it should bring in more revenue for the state", well, in that case, do it. Anything that brings in more revenue for the state is good. How about doing it on assets above 25 million baht, and not 50 million baht. When does inheritance tax start in England ? What about America and Australia ?

And once the law is brought in, do eveything possible to close the loopholes. Go on, junta, do this, most people in Thailand will love you for this. Who are the Thais who are going to NOT like this ? How many Thais have got tens of millions of baht ? Those people only make up a small percentage of the electorate, who cares if they are not going to vote for you ??

Australia doesn't have an "Inheritance Tax". They do have a "Capital Gains Tax", which applies when you sell any assets at any time.

[baboon]

Since there is no opposition, what a surprise!!

Quite. What a bloody farce, making out like there is some kind of debate, some kind of legitimacy to this rubber stamp assembly.

An absolute insult to the intelligence.

On the other hand, I find it interesting that a government which its detractors claim to be running things in the interests of the elite, should contemplate or pass such a thing as an Inheritance Tax, however low or watered-down ?

This measure has been needed for some time now, but nobody could raise the support to actually pass it, when democratically-elected ?

This is just another law that will not be obeyed unless they feel like it, another weapon to be wielded against one's political opponents.

Laws and taxes are for the likes of you and I, not them...

[whybother]

Since there is no opposition, what a surprise!!

Quite. What a bloody farce, making out like there is some kind of debate, some kind of legitimacy to this rubber stamp assembly.

An absolute insult to the intelligence.

On the other hand, I find it interesting that a government which its detractors claim to be running things in the interests of the elite, should contemplate or pass such a thing as an Inheritance Tax, however low or watered-down ?

This measure has been needed for some time now, but nobody could raise the support to actually pass it, when democratically-elected ?

This is just another law that will not be obeyed unless they feel like it, another weapon to be wielded against one's political opponents.

Laws and taxes are for the likes of you and I, not them...

"wielded against one's political opponents" "the likes of you and I"

Are we their political opponents?

[AyG]

This tax could be ruinous for family businesses, is unfair to unmarried (including same sex) couples, and to the infertile.

The absence of the concept of trust in Thai law makes it particularly unfair.

Its only virtue is that it will be relatively easy for individuals (apart from business owners) to evade.

I wonders what the real purpose of the new tax is. If the objective were simply to raise additional government revenue, it would be easier and more efficient to improve the collection of existing taxes.

Incidentally, does anyone know where I could find online a copy of the original text of the bill?

[jayboy]

Since there is no opposition, what a surprise!!

Quite. What a bloody farce, making out like there is some kind of debate, some kind of legitimacy to this rubber stamp assembly.

An absolute insult to the intelligence.

On the other hand, I find it interesting that a government which its detractors claim to be running things in the interests of the elite, should contemplate or pass such a thing as an Inheritance Tax, however low or watered-down ?

This measure has been needed for some time now, but nobody could raise the support to actually pass it, when democratically-elected ?

You make a very reasonable point.It's certainly worth considering why a government in service of unelected elites (I don't think most informed people would deny that) should implement a measure that is prima facie working against the elite's interests.Several aspects occur to me.First of all the devil is in the detail.If the measure is so watered down and weakly enforced, it won't have any meaning.On first glance the details look reasonable to me so the key aspect is likely to be enforcement.Secondly it isn't necessarily the case that a fairer tax system works against the interests of the rich and influential.As I have been trying to argue in many posts, any ruling class needs to have an understanding of enlightened self interest.In other words by agreeing a system that works to the benefit of all, the ruling class is able to presrve most of its power and influence but releases the pressure of social unrest and discontent.Unlike Britain, Japan and France the Thailand elite hasn't been very smart about this so far and thus has been risking much more than its equivalents elsewhere.Finally there is a tendency on all sides in Thailand to see things in black and white.Thus Thaksin is the devil incarnate or the elites are determined to crush the aspirations of the majority.Trouble is human beings aren't really like that.It's perfectly possible to hold a number of views some of them contradictory.My view is that the current government is a sad regression for Thailand but at the same time, despite the ineptitude of its leadership, I recognise - among its less noble characteristics - that there is a wish to improve the country's lot.The inheritance tax proposal may well form part of this.It's all a messy business -t alking, debating, disagreeing, examining one's prejudices, making compromises, accepting the other man's view, arguing one's case.It's called democracy.

[robblok]

Since there is no opposition, what a surprise!!

Quite. What a bloody farce, making out like there is some kind of debate, some kind of legitimacy to this rubber stamp assembly.

An absolute insult to the intelligence.

Finally something to go after the rich and the anti coup guys are moaning. This is something that should have been done ages ago going after the rich. Seems that even this junta sees that better as the super rich criminal proxy that held this back so long.

Its shows that at least these rich understand that the income gap is too big.. not something the Shins ever wanted to close as they then could not use the red mob anymore.

Edited December 19, 2014 by robblok

[Robert24]

not a good move for the Thai economy. This will drive away rich people, entrepreneurs and will become an admin burden for the government.

This article mentions Canada, Australia, New Zealand and Norway who have gotten rid of the inheritance tax but forgets to mention that both Singapore and Hong Kong have gotten rid of it as well. And in Europe Switzerland has gotten rid of it as well. And this is main driver for rich people to determine their tax domicile.

Rich Thai people can move their domicile at a heartbeat to Singapore or Hong Kong and avoid paying inheritance tax that way.

And from a tax control point of view, tax authorities can only control and levy inheritance tax effectively on land in Thailand. Other assets like securities, mutual funds, cash savings, gold, diamonds, art, property outside Thailand etc etc they cannot control. Also it is interesting that many Thais have transferred their properties and land to their children before this law and the gift law will come into effect.

I hope the PM gets some better advisors on matters relating to the economy. I understand that they are desperate to find more tax revenue but really they should look at making the government more effective rather than trying to raise more money.

[Tongdee]

This is such a bad way to run a country.

Is this worse than any government in the last 20 years, 30? I don't think so. Many of the things that have to happen for Thailand to progress are happening,

and expediently. Corruption getting blasted apart all over the kingdom. The police are performing many of their duties much more dilligently. Inheritence tax,

its about time. Next property tax. The government needs legitimate revenue sourceS so they can pay people like the police a livable wage,

if they are gonna chop down corruption. On the say so of the powers that be stuff thats gotta happen are happening without the previous haggeling

over extra "Fees" by the powers that used to be. I believe once they clean up the long standing mess that has accumulated over so many years

and create some much needed revisions to various "codes, free & fair elections will resume in a far better place than what existed when they took office ... ... ...

[ginbkk]

What will be an interesting point to (for me) will be inherited land tax. There are loads of old family-run restaurants that are located in the prime areas.

Edited December 19, 2014 by ginbkk

[rickirs]

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What if a TGF inherits from a non-resident farang boyfriend assets over 50M located outside Thailand and not taxed there (like in Singapore) ?
Would she have to declare the inheritance and pay the 10% tax over the 50M ?

I believe the inheritance tax applies principally to Thai registered assets such as real estate, vehicles, and securities. If the tax isn't paid in full, the State can confiscate those assets to cover the debt.