Less taxing times on the cards

Controversies of 2012

Published: 31 Dec 2012 at 00.00
Newspaper section: Business

Planned reductions in corporate and personal income tax are expected to cost the government upwards of 200 billion baht in tax revenue each year under a strategy aimed at encouraging investment, increasing disposable income and strengthening domestic demand.

Shoppers hunt for bargains in a Bangkok store. The current VAT rate, at 7%, ranks among the lowest in the world, and the cabinet will not have to consider whether to extend existing rates or allow VAT to increase to 10% as stipulated by law until 2014.

The long-standing corporate tax rate of 30% was cut to 23% in 2012 and will be cut again in 2013 to 20%. Overall, the Revenue Department estimates the impact of the tax reduction at 150 billion baht, based on returns for fiscal 2011.

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boons
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Discussion 1 : 31 Dec 2012 at 19.211
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Increasing spending, and decreasing taxation is classic stimulus policy. Of course it isn't sustainable -- but perhaps the more important question is "why now?". Thailand is not in the midst of a crisis, and yet these are crisis measures which should not be used simply for political gain.

This will end badly. If one were to try one's hardest to turn Thailand into another Greece (or Spain), this is exactly how to do it: Increase spending and decrease taxation.

Needless to say, it will feel good for a little while. Probably just long enough for the idiots to proudly proclaim, "See? It's working."
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Less taxing times on the cards | Bangkok Post: business