Thailand
Thailand: Finance Ministry readies rejig to create fairer tax system
The Finance Ministry is likely to announce some tax restructuring early next year to create fairer taxation, says permanent secretary Prasong Poontaneat.
The restructuring could be in place after the new year to stem loopholes because the current law is not comprehensive, hurting some and helping others in terms of tax liability, he said.
A committee tasked with revamping the tax structure of the Revenue Department, Excise Department and Customs Department is scheduled to have a meeting later this month, he said. The time frame for the rejig could be based on the economic and IT readiness and understanding of operators.
Fiscal stability and sustainability must be taken into account for the tax restructuring, Mr Prasong said.
The tax reform was initiated after the Palang Pracharath Party won the election, having made a campaign promise to cut personal income tax. Delivering such a tax reduction could mean billions in forgone revenue.
Finance Minister Uttama Savanayana said recently that the restructuring would lead to both tax cuts and hikes.
The cabinet’s recent approval of the Super Savings Fund to replace long-term equity funds (LTFs), for which the tax incentive is due to lapse at year-end, is also part of the tax reform.
The ceiling for personal income tax deduction will rise to 30% of annual income, not exceeding 200,000 baht.
The tax-deductible amount is capped at 500,000 baht a year when contributions to the new saving fund are added to retirement mutual funds (RMFs), provident funds, the Government Pension Fund (GPF), the National Savings Fund (NSF) and pension insurance premiums.
The lock-up for contributions to the Super Savings Fund is 10 calendar years.
Individual taxpayers are now allowed to deduct up to 15% of accessible income, or a maximum of 500,000 baht a year, whichever is lower, for contribution to LTFs.
The tax deduction for contributions to LTFs is separated from the 500,000-baht cap for contributions to RMFs.
The 500,000-baht RMF contribution limit must include contributions to provident funds, the GPF or the NSF, and pension insurance.
Source: https://www.bangkokpost.com/business/1816849/finance-ministry-readies-rejig-to-create-fairer-tax-system