The National Council for Peace and Order has instructed the Finance Ministry to seek tax measures that can foster social fairness and bridge income disparities while boosting revenue for government coffers, says a ministry source.
Prasong: Revenue collection target still on track
The long-awaited land and building tax has been proposed to the military junta for consideration, as it is among taxes that can reduce income inequality and increase government revenue, the source said.
Assets are used to calculate such tax, and local administrations will use the revenue to develop their areas.
A draft land and building tax bill proposed when the Democrat Party was in power stipulated a maximum 0.5% tax of the appraised value for property used for commercial purposes, up to 0.1% for residences and a ceiling of 0.05% for land used for agricultural purposes, while public areas, temples and palaces would be exempt.
The source said the ministry has also proposed the concept of inheritance tax to the junta, but the Fiscal Policy Office would not seriously push such a tax, saying it was unsure whether revenue would be worthwhile compared with the resources that tax-collecting agencies must fund.
Some loopholes would also make it difficult to collect the tax.
Some assets are mobile and can be deposited abroad, meaning the Thai government would then have no authority to charge tax on such assets, the source said.
"It's still questionable whether it is worthwhile to use huge resources for inheritance tax collection, which could generate only hundreds of millions of baht," the source said.
Heirs, descendants and people who receive bequests from persons who have passed away are related parties who could take responsibility for tax bills, the source said.
Revenue Department director-general Prasong Poontaneat said his department would do its best to achieve its tax revenue collection target of 1.89 trillion baht for fiscal 2014 ending Sept 30 even though collection was hit hard by the economic and political uncertainty that ended when the army took over administrative power with the coup on May 22.
In the worst case, the department should not miss the target by more than 100 billion baht or 5-6%, he said.
The department gathered 1.55 trillion baht from tax revenue during the first nine months of this fiscal year, which was 93.5 billion baht or 6.6% short of the target.
A cut in personal income tax, a lower contribution from a levy on value-added tax (VAT) on imported goods and a cut in corporate income tax to 20% from 30% contributed to the higher-than-estimated shortfall in tax revenue collection, Mr Prasong said.
VAT on consumption and services, however, showed signs of recovery, he said.
Mr Prasong said his department estimated the consumption tax would grow by 1.7% month-on-month in July after being 16.4% below target in June.
The Revenue Department will today hold a meeting with officials of its unit tasked with assessing tax payments of companies worth more than 30 million baht.
According to the law, companies that underestimate their profit by more than 25% are liable to a fine equal to 20% of the real tax liability by the Revenue Department.