The Revenue Department has tried to lure 90,000 e-commerce operators into the tax system, citing the sustainability of their businesses and the heavy penalty as reasons.
The penalty far outweighs the gains vendors can make from evading tax, says Mr Prasong. (File photo by Pattarapong Chatpattarasill)
E-commerce transactions have boomed in recent years, growing by 20% year-on-year to 744 billion baht in 2013, said director general Prasong Poontaneat at a seminar on Monday.
Of the total, 45% or 300 billion baht was business-to-government (B2G) transactions conducted by 100 operators.
Another 40%, or 200 billion baht, was business-to-business (B2B) deals done by 10,000 vendors.
Another 120 billion baht was business-to-consumer (B2C) transactions.
These three groups generally have a good understanding of e-commerce tax.
The remaining 124 billion baht was consumer-to-consumer trade (C2C) conducted by 90,000 small vendors, representing 58% of all 155,100 online traders.
The department aims to initially attract 20-30% of the last group to pay tax correctly as it will support their future growth.
At the current tax rate, the first 300,000 baht will be exempted and if revenue does not exceed 1.8 million baht a year, a vendor does not have to register for VAT purposes.
For instance, he said, if a vendor makes a 5% profit on revenue of 2 million baht a year, he will make 300,000 baht in three years.
But if he tries to evade tax by changing the brand name, bank account or trademark and is caught, he will be fined 700,000 baht including interest, a risk not worth taking, Mr Prasong said.