Thailand
Thailand: Tax experts urged to help close revenue gap
TAX specialists should assist in closing the “yawning” deficit in government revenue, Finance Secretary Carlos Dominguez 3rd emphasized on Thursday.
During the Tax Management Association of the Philippines’ induction and inaugural general membership meeting for 2022, he said that an interpretation of tax management in which a client pays for “specialists” to settle a reduced tax bill is not in the best interest of the country.
The difference between the effective and legal tax rates, Dominguez added, is an example of this. Despite the fact that the government met its revenue targets for 2021 and collected 9 percent more than in 2020, he noted, the effective tax rate on value-added taxes remained at 5 percent, compared to the legal rate of 12 percent.
According to investopedia.com, the effective tax rate is the percent of the income that an individual or a corporation pays in taxes.
Dominguez also said that before the Corporate Recovery and Tax Incentives for Enterprises Act went into effect, the effective rate for corporate income tax was only 9 percent compared to the legal rate of 30 percent.
“This is due to both evasion and avoidance. It might serve to improve the margins of taxpaying entities. But it prevents the nation from collecting enough to invest in productive projects,” he said.
The Finance chief added that the government would have had more cash to support its economic investments, debt service and Covid-19 response expenses if it had been able to collect all taxes due. It would have borrowed a smaller amount of money. The government would have been better positioned to invest in the people’s right to a thriving future.
“The yawning discrepancy between the effective tax rate and the legal rate did not occur by happenchance. This is the result of expert tax management,” he said.
In the event of a pandemic, Dominguez said, the government has done everything it can to protect people, offer vaccines and aid, and ensure that future risks to humanity — whether man-made or natural — are mitigated. In conclusion, the Cabinet official said that the government needs all the money it can acquire in order to handle the current challenges.
“We, therefore, call on you to step up and help build taxpayers’ trust; provide revenues for our socioeconomic programs; invest in technology; innovate your processes; and focus on protecting the environment,” he said.
Dominguez added that instead of looking for loopholes, tax specialists should urge firms to pay the correct taxes and follow the intent of the country’s tax laws.
Source: https://www.manilatimes.net/2022/02/04/business/top-business/tax-experts-urged-to-help-close-revenue-gap/1831694