Inheritors of assets worth more than 100 million baht will be taxed and only for the amount above that threshold, according to the latest version of the inheritance tax bill to be considered by lawmakers next week.
The bill, approved and revised by the National Legislative Assembly (NLA) panel chaired by Finance Minister Sommai Phasee, appears to be a watered-down version of the one proposed by the cabinet. The NLA will vet it by section on Thursday.
The revision of the threshold was a deep cut from 50 million baht set forth in the cabinet version. The tax rate remains at 5% of the inherited asset value for descendants and 10% for others.
The types of taxable assets are: (1) real estate; (2) securities as defined by the Securities and Exchange Act (treasury bills, bonds, bills; shares, debentures, investment units, etc); (3) deposits or similar types of instruments payable to owners at call; (4) registered vehicles (5) other financial assets to be defined by a royal decree.
The NLA panel version also requires the estate value to be appraised every five years based on the change in the consumer prices index used by the Commerce Ministry during the same period.
As well, the NLA panel version sharply reduced the penalties from what was stipulated in the cabinet version. Failure to declare inherited assets will result in a fine equivalent to 100% of the tax amount from 200%. In cases of incomplete or false declarations, the fine is revised down to 50% of the missing tax amount from 100% in the previous version.
Along with the property tax bill, the inheritance tax bill is high on the junta's to-do list as it is seen as a tool to narrow the gaping income disparity gap. It has faced strong opposition and a lot of lobbying is believed to have taken place to scrap the bill or at least tone it down to the point where it would be almost totally ineffectual. Mr Sommai admitted earlier that passing the bill would be a challenge.