Thailand
Thailand: Lost revenue from sales tax cut ‘insignificant’
The Excise Department’s sales tax cut is expected to cost the government less than 1 billion baht in forgone revenue, says the department’s chief.
The lost revenue is insignificant because some of the relevant items already imposed taxes at low rates and others have seen the deadline for lowered tax extended, said director-general Patchara Anuntasilpa.
The tax-collecting agency is offering sales tax reductions and a short-term tax break for certain businesses to help operators cope with the coronavirus crisis and encourage them to keep employees on payroll.
According to the tax breaks, the sales tax rate for electric tricycles has been halved to 2% and the rate for fruit and vegetable juices has been halved to 10%.
The department is offering those in the tourism and hospitality sectors who maintain their staff a corporate tax waiver until Sept 30. These businesses include spas, massage parlours, restaurants, pubs, bars and other types of entertainment establishments.
The department has also postponed plans to raise sales tax on tobacco and cigarettes from 40% to 60% from Oct 1 this year to Oct 1, 2021 and agreed to extend the maximum period for completing exports of tax-free goods from 15 days to 30 days and allow further extensions of up to 120 days if necessary.
The requirement to submit documents relating to such exports within 60 days is also being extended to 90 days.
To enforce the tax breaks, two ministerial announcements and another seven department announcements will be published in the Royal Gazette this week, Mr Patchara said.
He said the outbreak has taken a bite out of the Excise Department’s revenue collection because the affected items are for services and consumption.
The Excise Department has lowered its tax revenue collection target for this fiscal year to 600 billion baht from 640 billion baht set previously.
Source: https://www.bangkokpost.com/business/1947584/lost-revenue-from-sales-tax-cut-insignificant