The Finance Ministry has set up a committee to revamp the tax structure of the Revenue Department, the Excise Department and the Customs Department, says Finance Minister Uttama Savanayana.
The committee, chaired by permanent secretary for finance Prasong Poontaneat, is scheduled to have its first meeting on Friday. The committee members comprise representatives from the three tax-collecting agencies and the Fiscal Policy Office (FPO).
The tax restructuring is aimed at enabling the entire tax system to support the Finance Ministry’s main mission of sharpening the country’s competitiveness and taking care of people.
However, the restructuring will lead to both tax cuts and hikes, he said without diving deeper into details.
Mr Prasong said an e-business tax, which is now being interpreted by the Council of State, would boost the Revenue Department’s income and broaden the tax base.
Meanwhile, director-general of the Revenue Department Ekniti Nitithanprapas, said it is pushing the e-business tax bill to be deliberated by parliament this year to take force next year. The agency expects it to boost value-added tax (VAT) by 3-4 billion baht, levied on foreign online platforms without a physical presence in Thailand.
Large companies would not risk the hit to their reputation by avoiding payment of tax bills, but small companies can, he said.
To better prevent tax avoidance, the department is pushing an exchange of tax information law with other countries, said Mr Ekniti.
Failing to tax foreign-based online platform operators is a global problem and some countries have introduced a digital tax of 3% of transaction value. Thailand still needs time to study the tax, he said.
According to the e-business tax bill, digital platform operators providing services (including online games, sticker downloads, online ads, digital content and online hotel bookings) that generate annual sales of more than 1.8 million baht in Thailand are required to register for VAT payment and are liable for the sales tax.
Apart from tax revenue, the e-business tax is aimed at ensuring a level playing field between local and overseas-based online platform operators.
Regarding the Palang Pracharath party’s populist manifesto to cut personal income tax, Mr Ekniti said it would affect the Revenue Department’s tax income and it could deepen income inequality in the country if the rate cut also applies to those in the top tax bracket.
Personal income tax amounts to 400 billion baht and accounts for 17% of the Revenue Department’s income, targeted at 2 trillion baht this fiscal year.
Among 10.7 individual taxpayers, 3% are subject to the highest tax bracket and they contribute 72% of the personal income tax revenue.
For the 10 months through July, the Revenue Department gathered 1.60 trillion baht, exceeding the target by 3.1%.
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