Thailand
Thailand: Revenue mulls capital gains tax
The imposition of a capital gains tax on equity investments is being studied, including input from academics, but whether it will be enacted rests with the government, says the head of the Revenue Department.
The Revenue Department must consider the pros and cons of taxing gains from selling shares, said Ekniti Nitithanprapas, director-general of the department. The tax would boost the government’s coffers but could affect the capital market’s fundraising efficiency.
The study was initiated because of Thailand’s wide disparity in income, he said.
A capital gains tax requires thorough study as it is a sensitive issue, meaning such a levy would not be imposed anytime soon, said Mr Ekniti.
Capital gains from selling shares of a Thai stock have been tax-exempt since the Stock Exchange of Thailand (SET) was incorporated 40 years ago. However, the SET started paying corporate income tax in 2016 in an effort to avoid being considered a tax shelter.
Commenting on the government’s planned personal income tax cut, Mr Ekniti said it must not affect fiscal stability if a tax cut is passed.
The Revenue Department is the largest tax-collecting agency, contributing 70-80% of the government’s total income. Personal income tax amounts to around 400 billion baht a year, while the Revenue Department collects 2 trillion baht per year.
He said the Fiscal Policy Office is conducting a study on the government’s personal income tax cut campaign promise.
The tax incentive for long-term equity funds is due to expire this year, and Mr Ekniti said whether it is renewed depends on Mr Uttama’s policy. Mr Ekniti believes high-income earners obtain more benefits from tax-saving mutual funds than low-income earners.
In related news, he said the department aims for the stamp duty tax for five main agreements to be paid via electronic channels by 2021. The five are hire for work, loan or bank overdraft, power of attorney, proxies for voting at a company’s meeting, and guarantees.
Source: https://www.bangkokpost.com/business/1719063/revenue-mulls-capital-gains-tax