Thai-ASEAN News Network

20-Year-Old Tax Structure to Get Overhaul

UPDATE : 30 December 2011

The Revenue Department is planning to restructure the whole tax system as the current one has been in use for more than 20 years.

The department is considering lowering the personal income tax rate from 37 to 35 percent and revamping the tax bracket to ease taxpayers' burden and attract investments.

Director General of the Revenue Department Sathit Rangkasiri said he is collecting all the data on the restructure of the whole tax system.

The restructure will be submitted to the finance minister for consideration.

For individuals, the government is planning to lower the personal income tax rate from 37 to 35 percent and to modify the tax bracket to help taxpayers and attract more investments.

The department is looking to change the tax plan from the current 10, 20, 30, and 37 percent structure to a 10, 15, 20, 25, 30 and 35 percent structure.

Sathit believes the lower tax rate will also stimulate consumption.

The Revenue Department director general also announced that the government is planning to lower corporate income tax from 30 to 23 percent as outlined in the government's policy for 2012.

Moreover, he reiterated that those with monthly incomes lower than 20,000 baht will not have to pay income taxes.

Sathit added a set of special laws on tax collection and relief will be enacted to smooth out the new tax restructure.

The whole process is expected to take some time since the current system has been in use for over 20 years.

For the 2012 tax season, the government will expedite tax refunds within 7 days, from the original 15-day time frame. Currently there are about 9 million taxpayers in the system.

Most will file online. Out of this figure, 360,000 will be for personal income tax and 370,000 for value-added tax.

Currently, those with yearly incomes of less than 150,000 baht are exempted from personal income tax.

Those with yearly incomes of between 150,001 to 500,000 baht are imposed with the 10 percent tax rate.

People who earn between 500,001 to one million baht per year must pay the state 20 percent of their wages while those with an annual income of 1,000,001 to 4,000,000 baht will have to pay 30 percent.

Individuals who make more than 4,000,001 baht are subjected to the maximum rate of 37 percent.