Must relatively lower income Thai citizens pay a federal income tax on their earnings? Or: as a practical matter, do owners of small shops, cafes, and the like actually pay annual income taxes to the central government, or do they consider themselves exempt and not file? I've read that Thais must pay 5% on income over 150,000 baht a year, but do any of them that make just somewhat over that amount ever really do it?

Tax rates of the Personal Income Tax

 

Taxable Income  (baht)	Tax Rate  (%)
0-150,000	Exempt
more than 150,000 but less than 300,000	5
more than 300,000 but less than 500,000	10
more than 500,000 but less than 750,000	15
more than 750,000 but less than 1,000,000	20
more than 1,000,000 but less than 2,000,000	25
more than 2,000,000 but less than 4,000,000	30
Over 4,000,000	35

SME that have less than 1 million baht in yearly revenue are tax exempt.

So two books, one with real accounting and one if tax authorities comes by.

The 150,000 baht a year has lots of deductions you can make.

example:

30,000 baht for the taxpayer.

30,000 baht for the taxpayer’s spouse .

15,000 baht each child (limited to three children)

30,000 baht for each of taxpayer’s and spouse’s parents if such parent is above 60 years old and earns less than 30,000 baht

A tangent, but from an economics point of view income taxes are mad - you want to encourage people to work and produce output. That's why lots of economists favor a land value tax. Successful economies (like Singapore) don't tax things they want to encourage. 

Income tax compliance is likely low for small sole proprietor type businesses, but that in large part is why Thailand has a VAT tax which ensures that consumption will bring in revenues needed to operate.

Its called creative book work lol. As @PoorSucker says lots and lots of deductions to filter money away legally away from Tax man.

17 hours ago, Craig krup said:

A tangent, but from an economics point of view income taxes are mad - you want to encourage people to work and produce output. That's why lots of economists favor a land value tax. Successful economies (like Singapore) don't tax things they want to encourage. 

Singapore income tax:

 

https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Income-Tax-Rates/

Who is stupid enough to pay tax when it's so easy to evade ?

 

 

Who is stupid enough to pay tax when it's so easy to evade ?
 
 

Claim VAT back, we all pay tax.!.


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7 hours ago, FritsSikkink said:

Singapore income tax:

 

https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Income-Tax-Rates/

Exactly. Incredibly low, and very, very low for higher earners compared to other countries. 

 

Land value taxes - of various designs - mean that you attract people who can produce a lot in a small space and don't impose much cost on the state. 

 

http://www.rtpi.org.uk/briefing-room/rtpi-blog/lessons-from-singapore-about-land-value-capture/

 

 

10 hours ago, bberrythailand said:

Who is stupid enough to pay tax when it's so easy to evade ?

 

Everyone who has a work permit and wants a 1 year extension of stay.