A new personal income tax structure that will probably include wider taxable income bands is due to go before the cabinet for approval next month.
The wider bands for each of the seven tax brackets are aimed at easing the tax burden of salaried workers.
This, together with an increase in the maximum tax allowance for annual expenses from 60,000 baht to 100,000 or 120,000, will form the new tax structure, said Revenue Department director-general Prasong Poontaneat.
The tax overhaul is expected to cost tens of billions of baht in lost revenue, he said.
Whether the highest personal income tax rate is reduced will depend on the cabinet's decision. The new tax structure will come into force in 2017.
There are calls to trim the highest tax bracket to a combined 28% for corporate income tax and withholding tax, but they are not comparable, Mr Prasong said, because the corporate tax is a single rate and the personal tax has seven brackets.
Moreover, personal income tax offers more deductions and allowances than corporate income tax, he said.
In his view, the tax adjustment will be a win-win for all income earners.
Under the current structure of personal income tax, taxable income of 150,000 baht or lower is exempt from tax, 150,001 to 300,000 baht is charged at 5%, 300,001 to 500,000 baht is charged at 10%, 500,001 to 750,000 baht is charged at 15%, 750,001 to 1 million baht is charged at 20%, more than 1 million to 2 million baht is charged at 25%, more than 2 million to 4 million baht is charged at 30%, and more than 4 million baht is charged at 35%.
A Finance Ministry source specified two options for revising personal income tax: widening taxable income in each of the seven tax brackets and cutting tax rates.
The Finance Ministry's think tank, the Fiscal Policy Office, is apt to prefer increasing the taxable income amount in each bracket to slashing tax rates, reckoning that middle-income earners will reap more benefits under the former option.
The source said taxable income could be raised by 50,000 baht in each bracket.
For example, those who earn taxable income in a range of 300,001-550,000 baht will be liable for a 10% tax rate, compared with the current range of 300,001-500,000.
A total of 10.9 million people submit tax filings, but 6.4 million are exempt because their incomes are too low.
According to Revenue Department data, in 2014 the largest taxpayer group was those earning 150,001-300,000 baht, comprising 1.63 million people.
Only 24,700 people declared income of more than 4 million baht.