Local e-commerce operators are urging the government to impose lower rates of taxation in order to encourage them to enter the revenue system and pay proper taxes.
Offering lower rates to small and medium-sized enterprises could also encourage them to go online and promote the development of the digital economy, says Somwang Luangphaiboonsri, secretary of the Thai e-Commerce Association.
E-commerce in Thailand is burgeoning and the government's policy to move towards a digital economy is expected to paint a rosy picture for the sector, he said.
The Revenue Department recently released a report saying that up to 30% of tax-avoiding e-commerce operators are expected to enter the tax system this fiscal year, heeding the department's advice that it is not worthwhile risking hefty fines for tax evasion.
About 90,000 e-commerce service providers have not paid corporate income tax and all of them are small operators.
The Revenue Department has attempted to convince e-commerce operators to pay the correct tax amount or face fines of 200% of the unpaid tax plus interest of 1.5% per month if the department finds they have avoided paying tax.
Mr Somwang said the association had agreed with the Revenue Department's initiative to bring e-commerce operators into the tax system. But he warned the initiative might impede the entry of new online merchants.
The government should provide tax benefits or collect the tax at a lower rate than the normal one to facilitate wider use of e-commerce, he added.
He cited brokerage firms offering their clients low commissions for online stock trading to encourage online trading.
About 200,000 medium-to-large online merchants are in the tax system.
Thailand's B2C e-commerce market is expected to reach 150 billion baht this year, up 30% from 2013. The market is projected to continue growing by 40% next year thanks to the proliferation of smartphones and intense competition.
Nuttawit Polwattanasuk, managing director of LnwShop, a e-commerce marketplace with 200,000 merchants, said at least 100,000 small online shopping sites selling products via mobile instant messaging apps and social networks, were not in the tax system. "Companies with sales revenue below 100,000 baht a month should be granted a tax exemption," he said.
Mr Nuttawit suggested the government ask all online merchants to register as e-commerce operators with the Business Development Department, which is under the Commerce Ministry, to present themselves as legitimate businesses and protect consumers.