Tax deduction campaign to push Songkran spending up to 10 bil baht

[webfact]

Tax deduction campaign to push Songkran spending up to 10 bil. baht

BANGKOK, 11 April 2016 (NNT) - The Revenue Department believes the tax deduction campaign recently approved by the government will push up public spending during the Songkran festival.

Director General of the Revenue Department, Prasong Poontaneat has disclosed that the campaign which runs from 9th to 17th April enables holidaymakers to deduct up to 15,000 baht in their tax returns. The incentives apply to food, tour packages and hotel rooms offered by VAT-registered operators. The campaign is expected to increase the rate of spending during the Songkran holiday to a total 10 billion baht.

The cabinet has also approved a plan to extend the previous tax deduction campaign offering vacationers the same amount of tax deduction to the end of the year, in order to promote domestic tourism and boost spending. The offer, however, does not cover tobacco, alcoholic beverages, petrol or gas. Vehicles are also excluded.

Consumers eligible for the two campaigns can have their tax bills cut by up to 30,000 baht. Tax payers are required however to ask for detailed receipts as a claims reference.

-- NNT 2016-04-11

[jerojero]

And how exactly do foreign visitors receive this tax deduction?

[cloudhopper]

More stealth money printing given to the travelling elite.

[bubba]

And how exactly do foreign visitors receive this tax deduction?

This is meant to stimulate domestic travel and does not apply to foreign visitors. It is a Thai personal income tax deduction that would be applied to your 2016 income tax return.

[shirtless]

I cant see how this will help the country ,

[bubba]

I cant see how this will help the country ,

Perhaps the idea is to stimulate domestic travel over the Songkran holidays, possibly encouraging some to stay in Thailand rather than travel abroad. More baht spent at hotels and restaurants increases their income and creates jobs. More people out on the road travelling means more revenue for even small shops and noodle shops. Remember that you would also still be paying VAT and any additional profits at companies would pay tax on those, and this would offset some of the tax revenue cost.

[Rayk]

I cant see how this will help the country ,

Perhaps the idea is to stimulate domestic travel over the Songkran holidays, possibly encouraging some to stay in Thailand rather than travel abroad. More baht spent at hotels and restaurants increases their income and creates jobs. More people out on the road travelling means more revenue for even small shops and noodle shops. Remember that you would also still be paying VAT and any additional profits at companies would pay tax on those, and this would offset some of the tax revenue cost.

You actually think that small shops and noodle shops are paying VAT. When was the last time you or anyone for that matter paid the VAT and received a receipt at a noodle shop?

[Pimay1]

Money, money, money, money. And the god of Thailand is?

[webfact]

RELATED:

Songkran Tax Deduction – Infographic
Written by Interactive Associates

BANGKOK: -- In effort to increase domestic spending during the festival of Thai New Year – Songkran, the Thai government rolled out an incentive program allowing individual persons to deduct certain expenses from their total taxable income for the year of 2016.

Full story: http://www.thaivisa.com/forum/topic/909473-songkran-tax-deduction-infographic/

[Srikcir]

More tax deductions to stimulate the economy?

"Another factor that has not helped the country’s economy is the government’s comparatively low tax collection rates which are below 17 – 18 % of GDP.... This in turn directly affects the national budget which could undermine funds for the construction of key infrastructure projects" - former deputy prime minister MR Pridiyathorn Devakula, May 2016

The Prayut government has already made significant tax reductions in FY 2016 with some of them permanent. More tax deductions now will further undercut revenue collection and force a vey lean FY 2017 budget (Oct. 2016-Sept. 2017). If there is an elected government for FY 2018 it will be incapable of further economic stimulus to aid the nation in recovery.

[Bob12345]

I cant see how this will help the country ,

Perhaps the idea is to stimulate domestic travel over the Songkran holidays, possibly encouraging some to stay in Thailand rather than travel abroad. More baht spent at hotels and restaurants increases their income and creates jobs. More people out on the road travelling means more revenue for even small shops and noodle shops. Remember that you would also still be paying VAT and any additional profits at companies would pay tax on those, and this would offset some of the tax revenue cost.

You actually think that small shops and noodle shops are paying VAT. When was the last time you or anyone for that matter paid the VAT and received a receipt at a noodle shop?

The measure stimulates domestic travel by Thais.

More traveling means more sales at small shops and noodle shops, even though these expenses are not eligible for tax deduction.

I booked a hotel for one night near the end of Songkran when we return from visiting the inlaws.

That evening we will dine at a nice restaurant and use the receipt for my wife's tax return. But during the day we will drive more and need to eat also. That means we buy extra gas (no tax reduction), eat noodles at the gas station canteen (no tax reduction), and maybe even visit a national park nearby (no tax reduction) which we would otherwise skip.

[Bob12345]

My main problem with this scheme is as follows:

In many developed countries people either spend or save up their money. In case of economic downturn people tend to spend less and try to save up more as they have little confidence the economy will improve soon. This will hurt the economy further postponing the recovery. With a scheme like this you can stimulate consumption which can improve the economy and thereby lessen or stop the downturn.

In Thailand people barely save up money. They are in debt and use their disposal income completely to buy stuff they need and stuff they don't need. In case of an economic downturn you can stimulate spending, but every baht they spend now will be a baht less to spend in the future. If they go out for dinner during Songkran they will go out for dinner one time less the week after Songkran. So even before the positive effects of the extra spending start to help the economy the spending will decrease and the effects will be undone. The only hope is that people who were saving up will now spend more, and people who do not have savings will keep spending as always. But I am afraid that a lot of the poorer people start spending more as they tend to think short-term only leaving them deeper in the hole in the long run.

[thhMan]

But isnt that tax incentive nulled by the police/vendors/hotel operators/et who will fleece back any savings people may get?

[TheCruncher]

I cant see how this will help the country ,

Perhaps the idea is to stimulate domestic travel over the Songkran holidays, possibly encouraging some to stay in Thailand rather than travel abroad. More baht spent at hotels and restaurants increases their income and creates jobs. More people out on the road travelling means more revenue for even small shops and noodle shops. Remember that you would also still be paying VAT and any additional profits at companies would pay tax on those, and this would offset some of the tax revenue cost.

You actually think that small shops and noodle shops are paying VAT. When was the last time you or anyone for that matter paid the VAT and received a receipt at a noodle shop?

Noodle shops are the only restaurants in Thailand you're aware of? You must lead a glorious life.

[phoenixdoglover]

And after Songkran a drop in discretionary spending. Sigh.

[bark]

More tax deductions to stimulate the economy?

"Another factor that has not helped the country’s economy is the government’s comparatively low tax collection rates which are below 17 – 18 % of GDP.... This in turn directly affects the national budget which could undermine funds for the construction of key infrastructure projects" - former deputy prime minister MR Pridiyathorn Devakula, May 2016

The Prayut government has already made significant tax reductions in FY 2016 with some of them permanent. More tax deductions now will further undercut revenue collection and force a vey lean FY 2017 budget (Oct. 2016-Sept. 2017). If there is an elected government for FY 2018 it will be incapable of further economic stimulus to aid the nation in recovery.

Thank you for your Copy and Paste. Can you also color and stay within the lines ?

[bubba]

I cant see how this will help the country ,

Perhaps the idea is to stimulate domestic travel over the Songkran holidays, possibly encouraging some to stay in Thailand rather than travel abroad. More baht spent at hotels and restaurants increases their income and creates jobs. More people out on the road travelling means more revenue for even small shops and noodle shops. Remember that you would also still be paying VAT and any additional profits at companies would pay tax on those, and this would offset some of the tax revenue cost.

You actually think that small shops and noodle shops are paying VAT. When was the last time you or anyone for that matter paid the VAT and received a receipt at a noodle shop?

No I do not think that small shops are registered and paying VAT. To answer your second question, I have never requested a VAT receipt from a noodle shop.

Read what I posted and my point was: if the tax deduction campaign does indeed get more people out on the road with domestic holidays, that means more business for everyone. This includes noodle shops that do not have a VAT registration. But they have contributed to VAT revenue with all the food and supplies they bought at Makro and this is included in the net price of your bowl of noodles.