Thailand
Thailand: Key official seeks to revoke VAT break
Removing the value-added tax (VAT) exemption for goods of up to 1,500 baht per parcel and imported through the post is crucial to levelling the playing field for local vendors, particularly small and medium-sized enterprises (SMEs), says the Revenue Department.
The VAT exemption is unfair to local SMEs because trade is now borderless and scrapping the privilege will help these small businesses avoid going under, said director-general Ekniti Nitithanprapas.
The Revenue Department wants to revoke the tax exemption but must defer to the Customs Department’s mandate, he said.
One of the barriers hampering cancellation is that millions of parcels are imported each year but state officials can decide at random whether the claimed price of goods is lower than it should be. Technology, especially scanning machines, is the solution, Mr Ekniti said.
Cross-border trade through e-commerce is increasing, so authorities need to rejig related laws to catch up with the shift, he said.
For example, the Revenue Department has pushed a draft e-service act that received cabinet approval. The aim is to impose a VAT on foreign-based online platforms that generate income in Thailand.
The Revenue Department has made great strides in developing digital technology to enable tech-savvy startups to link to the department’s online platform, Mr Ekniti said.
The greater convenience will help boost the number of personal income tax filers to 11.4 million from 10.6 million within one year, he said.
The Revenue Department’s digital transformation is aimed at not only running working processes on the digital platform, but also speeding up and simplifying the process.
Mr Ekniti said the department is testing a blockchain-based VAT system in the regulatory sandbox in the hope that the technology will prevent fraudulent VAT invoices, as the blockchain can verify purchasing transactions.
The blockchain will also enable people to settle taxes related to transactions without waiting for a tax refund.
Source: https://www.bangkokpost.com/business/1947768/key-official-seeks-to-revoke-vat-break