The inheritance tax bill has been passed in a 145-5 vote, with the threshold set at 100 million baht and a 5% tax rate charged on the portion above it.
The bill sailed through the second and third readings in the National Legislative Assembly (NLA) on Friday. It will take effect 180 days after being promulgated in the Royal Gazette.
It was a watered-down version of the NLA panel chaired by Finance Minister Sommai Phasee compared to the draft proposed by the government.
Under the new law, inheritors of assets worth more than 100 million baht will have to pay a 10% inheritance tax for the portion above it. If the beneficiary is a descendant, the rate is halved to 5%.
In the government version, the threshold is set at 50 million baht.
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.
Failure to declare inherited assets will result in a fine not exceeding 500,000 baht. Anyone who destroyed, moved, or transferred inherited assets to others will face a jail term not more than two years and a fine not exceeding 400,000 baht. An attempt to evade the tax will result in imprisonment of not more than one year, or a fine not more than 200,000 baht.
ACM Chana U-sathaporn, a panel member, said the higher threshold was to ensure the tax would not discourage fledgling entrepreneurs who want to pass on businesses to their children.
"As for suggestions farm land and residential property should be exempted, I insist anyone who has assets worth more than 100 million baht is definitely rich and not a farmer. Besides, no one would farm on a 25-rai plot in Ratchaprasong, which would make it worth more than 100 million baht," he said.
Earlier, Mr Sommai had said the government insisted on the 50-million-bant threshold. "Let's see who loves the country more. The tax collection is unlikely to be substantial but it shows how much one loves the country, how the rich should help the poor and how the wealthy should support the country more so the government has more to spend to help the underprivileged."
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 faced strong opposition and a lot of lobbying was 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.