The Revenue Department must tighten its scrutiny of taxpayers and expand efforts to broaden the tax base to help compensate for revenue declines from cuts in the corporate tax rate, says director-general Satit Rungkasiri.
Speaking yesterday, he said officials will pay extra attention to parties who have previously skirted their tax returns.
"If past tax evaders go to work at a company, then we'll also look closely at that company's returns," said Mr Satit.
From Jan 1, the corporate tax rate will fall to 20% from 23% this year and 30% last year.
Mr Satit estimated it could take four or five years before efforts to improve collection efficiency and broaden the tax base generate enough revenue to offset losses from the reduction in the corporate tax rate.
He pleaded with the government to give tax officials the tools and resources they needs.
"If you go fishing in the ocean by hand, you definitely will catch less fish than if you use a boat," said Mr Satit.
The Revenue Department has long argued for funding to increase staffing and modernise its IT systems.
For example, the department wants to shift to electronic filing for value-added tax (VAT), where both purchasers and buyers must file online, which would help improve efficiency in tax auditing and reconciling transactions across different parties.
It also wants to launch an "RD card" system, where purchases are recorded electronically and linked to Revenue Department databases.
Users would be offered special tax deduction incentives to encourage use.
Mr Satit said the current VAT rate of 7% is one of the lowest in the world but acknowledged the government is unwilling to raise it.
Each percentage-point increase in the VAT is equal to 60 billion baht in tax revenue per year.
The Revenue Department has a target of 1.77 trillion baht for fiscal 2013 beginning last month.
Thailand's government revenue amounts to just 17% of GDP, a far cry from developed countries such as Germany at 44% or even Singapore at 23%.
About the author
- Writer: Wichit Chantanusornsiri
Position: Business Reporter