The Revenue Department hopes to add 200,000 income earners to the tax system in fiscal 2013 to widen its tax base and offset shrinking corporate income tax revenue, says director-general Satit Rungkasiri.
Despite efforts to have more people start paying personal income tax, about 10,000 are added each year.
Given the lower tax revenue projection, 200,000 new taxpayers a year is now the target.
"The reduction of corporate income tax rate to 23% in 2012 and 20% in 2013 from 30% previously will affect state revenue. We need to work harder to ease the pressure," said Mr Satit.
The government has massive investment plans over the next several years.
Mr Satit said National Statistical Office data showed there are some 350,000 income earners that should have paid personal income tax.
Besides, artifact and amulet traders as well as grey-market car importers are being targeted by the department as sources of higher tax revenue.
Higher taxes are projected for some sectors such as the automobile industry, which benefits from the government's first-time car buyer scheme. Hotels, restaurants, banks and insurance companies have also done well this year.
The reduction of corporate income tax will come with stricter tax inspections, he said.
"We're considering stepping up the penalties for tax evasion to deter tax cheats," said Mr Satit.
In fiscal 2013 ending next Sept 30, the department targets total revenue of 1.77 trillion baht, up by 9% from 2012's tax collection.
Revenue from the department represents 85% of total income of the government.
Mr Satit said the transfer pricing by large corporations is also a concern, and the department has plans to plug any loopholes.
The department yesterday held a seminar in Bangkok to discuss the issue with the International Finance Corporation to seek preventive measures.
Mr Satit said law amendments would be proposed to empower the department to share information with other countries in order to access international corporate information more easily.
Transfer pricing is a major loophole, as it allows big companies to transfer parts of their profits to be booked by their subsidiaries for tax purposes such as to those that have enjoyed tax breaks from the Board of Investment or to sister companies abroad.
The amounts can then be booked as expenses by the transferring companies, thereby reducing their profits and tax liabilities.
"In the past, we found some companies have been adopting these tactics and saved tax payments by as much as 300-400 million baht a year," said Mr Satit.
In terms of inspection, the department establishes average earnings for each segment or industry, and those deviating from the mean will be scrutinised.