|
|
| • EXCH RATES |
|
Baht/$ 34.24/29 (Bid/Ask)
|
GOLD |
14050
-400
|
|
PERSONAL FINANCE
WICHIT CHANTANUSORNSIRI
Retirees this year could get a reprieve from the tax man under a regulatory proposal that allows workers to continue to invest in their retirement funds even after reaching retirement age.
Members of voluntary provident funds or the civil service's Government Pension Fund would be allowed to maintain their savings in their existing fund without incurring liability for capital gains taxes.
Sanit Rangnoi, a Revenue Department tax adviser, said the current tax code waives tax liability for employees reaching the retirement age of 60 for funds withdrawn from provident funds or the GPF. A worker may maintain a savings pool with his or her fund for up to one month after reaching retirement age and still enjoy the waiver on capital gains taxes.
But cataclysmic volatility in the global financial markets has taken a sharp toll on the performance of many funds, with share prices falling by 45% for the year to date. Members exiting their funds this year must realise losses under mark-to-market accounting rules that put them at a clear disadvantage to younger employees who can hope for a recovery in share prices once the current crisis passes.
Under the proposed tax change, retirees would have the option of maintaining their retirement savings with their provident fund or the GPF at their discretion. Subsequent withdrawals would still be made without tax liability.
"I don't think it would take long to approve the change," said Mr Sanit. "What we hope is that if the Revenue Department signals its clear intent to assist them, retirees will feel no pressure to immediately withdraw from their retirement funds."
But transfers from a provident fund to a retirement mutual fund or long-term equity fund would in principle not qualify for the capital gains tax waiver, he said.
"In principle, if funds are transferred, it should be between similar fund types [if tax benefits are to be maintained]," he said.
The Revenue Department is also considering waiving tax liabilities for listed companies issuing treasury stocks, although this is complicated by loss-generating share buybacks already counting as a liability for tax purposes.
Meanwhile, cabinet ministers today are expected to approve a plan to increase tax deductions for contributions to long-term retirement funds and retirement mutual funds under a programme to support the capital market.
Contributions of up to 700,000 baht per fund class will be deductible from taxable income this year, up from 500,000 baht, although the current ceiling of 15% of revenues will be maintained. The increase would be restricted to investments made in the current year.
"With the current slide in share prices, it's a golden opportunity for local investors to purchase stocks," said Mr Sanit.
Prev
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Next
