Thailand: E-business tax targeted to fill coffers

• Jan 08, 2018

The Revenue Department estimates its annual tax revenue growth will triple to 15% after the e-business tax, a levy on any online transaction that takes place in Thailand regardless of the e-commerce operator’s location, comes into force.

The department’s tax revenue has increased 5% or 100 billion baht a year on average, but the growth pace will be 15% or 300 billion once the e-business tax is enforced, said Prasong Poontaneat, the department’s director-general.

The department will conduct a second hearing of the draft e-business tax this month to measure public opinion before proposing it for cabinet approval.

The draft bill requires online vendors who use a domain name in Thailand and have a payment system in baht, or transfer money from here, to pay the tax.

Electronic media operators who earn income from advertising and website rental will be responsible for withholding tax and remitting it to the Revenue Department.

The draft bill for the e-business tax has set a ceiling rate of 15%, but the applicable rates will vary depending on the nature of the business.

If the bill is enforced, online vendors with an overseas presence but with domestic transactions are required to sign up for the VAT system if they earn an annual income of more than 1.8 million baht from selling products and services.

The draft e-business tax will also annul the Revenue Department’s VAT exemption for online shopping for goods worth less than 1,500 baht that are bought from vendors located outside of Thailand.

The department earlier expected the e-business tax would come into force this year, allowing the tax-collecting agency to gather revenue from rising online sales transactions.

All electronic tax activities including e-tax invoices and e-withholding tax will be legalised if the e-tax law goes into effect. The tax is further intended to beef up collection efficiency as the system will alert the department every time a transaction is made.

To facilitate the e-tax system, the department will need to invest 2.3 billion baht to install a big data analytics system.

After implementation of the e-business tax and e-tax system, the department has set an initial revenue target of 2 trillion baht for the 2019 annual budget, he said.

For the 2018 fiscal year, Mr Prasong said the department’s tax revenue target of 1.93 trillion baht is reachable as GDP growth is expected to come in at 4%.

Investment in the Eastern Economic Corridor will increase tax collected from the construction sector, while strong exports, improving farm product prices and oil prices are also projected to boost tax revenue if they stay within a target range.

The Revenue Department has missed its tax collection target over the past few years, falling short of the target by 70 billion baht last fiscal year.

Source: https://www.bangkokpost.com/business/news/1392038/e-business-tax-targeted-to-fill-coffers