The department also signalled that it would order a block on the websites of any of the global e-commerce giants that failed to pay the tax.

 In other financial measures announced yesterday, the Cabinet approved tax credits for companies that hire holders of the state welfare cards. The tax credits would be applied at up to 1.5 times the expenses of such companies. The government stands to forego tax revenue of as much as Bt3 billion a year as a result of this initiative to help the poor.

Prasong yesterday said the department would this month submit a tax bill covering e-commerce to Finance Minister Apisak Tantivorawong for endorsement, before it goes to the Cabinet for approval.

If the draft law is approved, it will be forwarded to the National Legislative Assembly for debate.

Prasong said the department wanted to impose the 7 per cent VAT on goods sold to Thai consumers.

The department would seek cooperation from the Digital Economy and Society Ministry in encouraging foreign e-commerce operators to participate in the tax collection system, he said. His comments signal that Thailand is prepared to block the websites of foreign e-commerce websites if they do not pay the tax.

Asking whether the big e-commerce operators might attempt to shift the tax burden to Thai consumers, Prasong said that if they charged higher prices, consumers would instead buy from local businesses.

Currently, he said, foreign e-commerce operators take advantage of a legal loophole by issuing multiple bills for each transaction, none for more than Bt1,500 and thus they are not subject to taxation.

The practice is unfair to local online traders who are subject to the 7 per cent VAT.

The e-commerce market in is expected to see high growth this year, estimated at a 17 per cent gain from the previous year, Prasong said.

Thailand has about 300,000 e-commerce vendors, most of them small businesses.

The bill has already passed a public hearing procedure required by the constitution.

 “Almost all the people that made comments on the draft e-commerce law were foreigners. Only two Thai people made suggestions on the draft posted on the Revenue Department’s website,” Prasong said.

He also said that the department would collect tax from those engaging in transactions of digital currencies and initial coin offerings (ICOs). 

Tax collections will follow when the Finance Ministry, the Bank of Thailand, the Securities and Exchange Commission and the Anti-Money Laundering Office put in place law and regulations governing digital currencies, he said.

The department has also collaborated with the Department of Business Development (DBD) on electronics tax filings. Under proposed changes, corporations would file their financial statements to only the DBD, then their information would automatically be linked to the Revenue Department system for tax payment purposes.

The two departments signed a memorandum of understanding on the arrangement yesterday.

“This will reduce the cost and time involved for businesses,” said Kulanee Issadisai, the director general of the DBD.

The electronics filings may also contribute to a potential upgrade in the country’s ranking on the ease of doing business report that is put out by the World Bank, she said.

Some 680,000 businesses are registered with the DBD and about 620,000 of them have to submit their financial statements to the DBD by the end of May, Kulanee said.

Source: http://www.nationmultimedia.com/detail/Economy/30340328