Thai Finance Ministry keen to reform income tax system

[webfact]

Finance Ministry keen to reform income tax system
ERICH PARPART
THE NATION

BANGKOK: -- THE FINANCE MINISTRY is speeding up its effort to restructure the personal-income-tax system, with details of an amendment to the Revenue Code expected to be approved by the Cabinet in March.

The ministry is studying whether to lower the tax ceiling or adjust the number of tax brackets.

Currently individuals earning less than Bt150,000 per year are exempt from income tax, while those making more than Bt4 million per year are currently subject to the top 35-per-cent bracket. The other tax brackets are 5 per cent, 10 per cent, 15 per cent, 20 per cent, 25 per cent and 30 per cent.

Prasong Poontaneat, director-general of the Revenue Department, said yesterday that any changes made to the personal-income-tax structure would benefit taxpayers.

The new structure will be considered by the Cabinet this quarter, then after Cabinet approval, the amendment will have to be considered by the National Legislative Assembly.

It should be effective one year from now.

Everyone should be happy, as all will benefit from the new structure, he said.

The government wants to lower the personal-income-tax rates in the seven brackets so that the country can attract more foreign investment.

It also wants to bring the personal-income-tax rates in balance with the corporate rate. The corporate income tax rate was cut to 20 per cent permanently last year.

Prasong said Thailand's corporate-income-tax rate was now the second-lowest among Asean countries after Singapore's 16 per cent.

By narrowing the gap between personal and corporate rates, the government hopes to gain more tax revenue, since many evade taxes by moving personal income to corporate income to pay the lower rate.

Expatriates in Asean countries have also preferred working in Singapore to Thailand because of the lower personal-income-tax rates.

To attract more foreign professionals and companies to set up regional offices and international trading headquarters in Thailand, the government plans to make both corporate and personal income-tax rates more competitive.

The Finance Ministry yesterday also released details of a tax amnesty for small and medium-sized enterprises. It includes incentives of a zero rate for the first year and a reduced rate of 10 per cent for the second year.

At the start of this year, a new vehicle tax also became effective based on emissions and aimed at protecting the environment. The new tax structure favours eco-friendly and small vehicles, which emit less air pollution.

Next month, Thailand's inheritance tax will also become effective for the first time in decades, aimed at redistributing wealth even though collections are expected to be relatively small because of a low tax rate.

Another key element of tax reform is the real-estate tax. The proposal is still undergoing review by the economic team led by Deputy Prime Minister Somkid Jatusripitak.

Source: http://www.nationmultimedia.com/business/Finance-Ministry-keen-to-reform-income-tax-system-30276142.html


-- The Nation 2016-01-05

[tbthailand]

this article is so full of logic-errors that I have to think that the reporting was completely wrong or the revenue department is run by imbeciles.

Take for example,

Prasong Poontaneat, director-general of the Revenue Department, said yesterday that any changes made to the personal-income-tax structure would benefit taxpayers.

which is just logically, untrue. Either the man was misquoted (twice in this article), or he is daft, or he is lying...

And this little gem:

It also wants to bring the personal-income-tax rates in balance with the corporate rate. The corporate income tax rate was cut to 20 per cent permanently last year.

By narrowing the gap between personal and corporate rates, the government hopes to gain more tax revenue, since many evade taxes by moving personal income to corporate income to pay the lower rate.

so in other words, people are 'cheating" on personal income by declaring it as corporate income and paying a lower rate. OK, let's believe this for the moment. Now this genius has the idea of collecting more revenue by essentially making the personal tax brackets the same as the corporate tax bracket... So that now people don't need to "cheat" in order to pay the lower tax rate, ... they just get to pay the lower rate legally.

Some one in the revenue department was sleeping through basic math classes....

Now if they want to do something to help the budget, they could just start charging capital gains on SET trading.

[SoFarAndNear]

this article is so full of logic-errors that I have to think that the reporting was completely wrong or the revenue department is run by imbeciles.

Take for example,

Prasong Poontaneat, director-general of the Revenue Department, said yesterday that any changes made to the personal-income-tax structure would benefit taxpayers.

which is just logically, untrue. Either the man was misquoted (twice in this article), or he is daft, or he is lying...

And this little gem:

It also wants to bring the personal-income-tax rates in balance with the corporate rate. The corporate income tax rate was cut to 20 per cent permanently last year.

By narrowing the gap between personal and corporate rates, the government hopes to gain more tax revenue, since many evade taxes by moving personal income to corporate income to pay the lower rate.

so in other words, people are 'cheating" on personal income by declaring it as corporate income and paying a lower rate. OK, let's believe this for the moment. Now this genius has the idea of collecting more revenue by essentially making the personal tax brackets the same as the corporate tax bracket... So that now people don't need to "cheat" in order to pay the lower tax rate, ... they just get to pay the lower rate legally.

Some one in the revenue department was sleeping through basic math classes....

Now if they want to do something to help the budget, they could just start charging capital gains on SET trading.

His logic is to courage cheaters to go legit and non tax payers to pay any tax because of lower rates.

[phoenixdoglover]

The primary reason for lowering high bracket tax rates is to give rich people more after-tax income. The belief this will lead to productive investments is an article of faith among those same beneficiaries. The rest is an elegant smokescreen. FDI is determined by so many factors; personal income tax rates is not one of the major factors.

The rich have friends in government and the bar for enacting new laws is marvelously low right now. It's a golden opportunity.

[futsukayoi]

So it is income tax making professionals and companies set up regional offices in Singapore rather than Thailand. Nothing to do with efficiency, good infrastructure, a highly educated English speaking workforce, very low corruption, transparent legal system etc

[Langsuan Man]

The primary reason for lowering high bracket tax rates is to give rich people more after-tax income. The belief this will lead to productive investments is an article of faith among those same beneficiaries. The rest is an elegant smokescreen. FDI is determined by so many factors; personal income tax rates is not one of the major factors.

The rich have friends in government and the bar for enacting new laws is marvelously low right now. It's a golden opportunity.

In US Republican speak this is called trickle down economics

[Pib]

Prasong Poontaneat, director-general of the Revenue Department, said yesterday that any changes made to the personal-income-tax structure would benefit taxpayers.

Yea, right! The goal is to increase tax revenue. Recent changes to the tax code like the inheritance tax, proposal land & building tax, and other tax changes have all increased tax revenue by taxing something that was not taxed before or at a much higher rate. And let's not forget the new revised excised tax on new vehicles which went into effect 1 Jan 16 based on emissions vs engine size...this will increase the cost of all new vehicles especially those with larger engines like 3L and up....will no doubt be another drag on vehicle sales that is already hurting due to the Yinluck administration vehicle tax rebate scheme and a slowing economy. Yes, right....the new tax structure will benefit taxpayers.

[Srikcir]

It seems that so long as the military has direct access to the nation's treasury, it needs to increase revenues from the taxpayers to continue its buying spree of executive jets, tanks, surface-to-air missles, submarines, helicopters, ships, etc.

The Thai military budget for 2016 calls for a 7%-8% increase over 2015. This amounts to about 1.5% of GDP. It doesn't look like Thailand's economic depression has affected the one industry that doesn't manufacture and sell products - the military.

[Ricardo]

this article is so full of logic-errors that I have to think that the reporting was completely wrong or the revenue department is run by imbeciles.

Take for example,

Prasong Poontaneat, director-general of the Revenue Department, said yesterday that any changes made to the personal-income-tax structure would benefit taxpayers.

which is just logically, untrue. Either the man was misquoted (twice in this article), or he is daft, or he is lying...

<snip for brevity>

No, applying logic, any raising of income-tax thresholds or reduction of tax-rates would benefit taxpayers, wouldn't it ?

Not that he said that they plan either/both of those two things, just that he's not necessarily daft or lying.

[Sydebolle]

Could anyone try to get the list of, say the top 100 income tax payers in the land by nationality please?

[Ricardo]

this article is so full of logic-errors that I have to think that the reporting was completely wrong or the revenue department is run by imbeciles.

Take for example,

Prasong Poontaneat, director-general of the Revenue Department, said yesterday that any changes made to the personal-income-tax structure would benefit taxpayers.

which is just logically, untrue. Either the man was misquoted (twice in this article), or he is daft, or he is lying...

<snip for brevity>

No, applying logic, any raising of income-tax thresholds or reduction of tax-rates would benefit taxpayers, wouldn't it ?

Not that he said that they plan either/both of those two things, just that he's not necessarily daft or lying.

Sorry, correction, upon re-reading the OP I see "The government wants to lower the personal-income-tax rates in the seven brackets", so he did say how their planned changes would actually benefit taxpayers.

So definitely no logical-error, after all.

[torpedo1970]

Thainess at it best.

Lets make a new law that everybody just ignore....

They should enforce the laws they already have...... but oh, thats hard work.... better to make new laws....

TIT

[Felt 35]

Could anyone try to get the list of, say the top 100 income tax payers in the land by nationality please?

Edited January 5, 2016 by Felt 35

[tbthailand]

this article is so full of logic-errors that I have to think that the reporting was completely wrong or the revenue department is run by imbeciles.

Take for example,

Prasong Poontaneat, director-general of the Revenue Department, said yesterday that any changes made to the personal-income-tax structure would benefit taxpayers.

which is just logically, untrue. Either the man was misquoted (twice in this article), or he is daft, or he is lying...

<snip for brevity>

No, applying logic, any raising of income-tax thresholds or reduction of tax-rates would benefit taxpayers, wouldn't it ?

Not that he said that they plan either/both of those two things, just that he's not necessarily daft or lying.

Sorry, correction, upon re-reading the OP I see "The government wants to lower the personal-income-tax rates in the seven brackets", so he did say how their planned changes would actually benefit taxpayers.

So definitely no logical-error, after all.

they are 'studying' lowering or changing the brackets, but his statement is that *any* change to the tax structure *will* benefit the people.

And that is patently not true on so many levels. Just as an example, if the main feature of the changes is to lower taxes on the wealthy in Thailand (who are arguably already not pulling their weight), than other Thais could either see their own tax contributions increase or see government services to them cut...

Whenever someone claims that there is NO downside, that is when people need to pay close attention to their real actions.

[tbthailand]

It seems that so long as the military has direct access to the nation's treasury, it needs to increase revenues from the taxpayers to continue its buying spree of executive jets, tanks, surface-to-air missles, submarines, helicopters, ships, etc.

The Thai military budget for 2016 calls for a 7%-8% increase over 2015. This amounts to about 1.5% of GDP. It doesn't look like Thailand's economic depression has affected the one industry that doesn't manufacture and sell products - the military.

do you recall the increase to the military budget in 2015, too? From memory, it seems like it was in the same range. Ah - found the spending in this graph, looks like about 5%...

But the graph shows that the generals have hit the jackpot since they overthrew Thaksin... military spending has more than - more than - doubled since 2006...

graph is 2005 to 2015:

and here is a reason to not trust the military with more money

[Pib]

Could anyone try to get the list of, say the top 100 income tax payers in the land by nationality please?

I'm not sure a 100 people in Thailand pay personal income taxes....too much trouble...mai ao.

[elgordo38]

Could anyone try to get the list of, say the top 100 income tax payers in the land by nationality please?

I'm not sure a 100 people in Thailand pay personal income taxes....too much trouble...mai ao.

I think GE in the States comes in at a -64%. I read somewhere on the 25 biggest tax dodgers there and GE topped the list.