Government insists on making proposals at the research period after speculation about a VAT increase sprang up.
Described: 12 Dec 2024 at 20: 03
After the opposition’s party suggested restructuring the system, the government was pressed by the opposition’s People’s Party on Thursday to understand its plans for tax reform. The government insists that everything is still in the study stage and that no practical recommendations have yet been made.
On the first day of the fresh House session, People’s Party MP Sirikanya Tansakun challenged the government to understand remarks made by Finance Minister Pichai Chunhavajira and echoed by the agency’s permanent director for funding regarding the revision of the nation’s tax structure.
Even though she typically concurred with any suggestions for improving the tax system to generate more revenue, Ms. Sirikanya said these suggestions should been supported by a compelling justification.
Citing her understanding of Mr Pichai’s remarks, she said corporate tax would be lowered from 20 % to 15 %, and personal income tax would be made a single rate of 15 % ( instead of the current range of 5-35 % ) while value-added tax (VAT ) would be raised from 7 % to 15 %.
Although this might lead to a decrease in business tax revenues of about 190 billion baht, she said that income earners who earn less than 300,000 baht per month may be required to pay a higher rate of earnings income.
” That’s why I’m completely unsure whether this plan will actually help the state create more tax revenue while having the least possible impact on the general public, as promised,” she said.
Why on earth is the state considering raising the VAT to make up for the loss, if the state actually isn’t aware of this estimated substantial revenue lost?
Mr Pichai said VAT, which has been at 7 % for three decades, could rise as high as 15 % — an idea that was quickly shot down by Prime Minister Paetongtarn Shinawatra.
As a way to bring talent from worldwide to aid with economic growth, the minister said, a level 15 % rate for personal income tax would be provided to some highly qualified people as a way to attract talent from overseas. He did not recommend abandoning the country’s current progressive tax system.
Ms. Sirikanya questioned whether the government’s proposed tax reform is merely an attempt to bring Thailand’s corporate tax to the minimum 15 % that the Organization for Economic Co-operation and Development ( OECD ) has suggested applies to all multinational corporations with at least 750 million euros in annual sales.
Julapun Amornvivat, the ministry’s deputy finance minister, reported that the government was looking into how to increase tax revenue to help fund plans to implement widespread assistance for the poor.
Currently, Thailand’s tax revenues account for only about 14 % of its gross domestic product ( GDP ), which is far below the global average of 18 %, he said.