Corporate tax evasion has declined following the government's reduction in the tax rate, says the Revenue Department.
Director-general Satit Rungkasiri yesterday said tax paid by small firms has been on an upswing since the corporate income tax was cut to 23% last year from 30%, implying that they may be filing tax based more on actual revenue, he said.
However, taxes paid by large companies are about what was paid before due mainly to standardised accounting systems.
Under the government's corporate income tax reduction plan, the rate will be cut further this year, to 20%.
To prevent companies from exploiting the corporate income tax cut by reporting lower-than-actual revenue, the department will compare companies' new filings with their revenue, profit and tax payment track records in recent years, said Mr Satit.
He said he is not satisfied with the amount collected by the Revenue Department even though it accounted for 12% of gross domestic product (GDP) last year or 8.9% of nominal GDP.
Nominal GDP takes into account all the price changes and inflation rate during the year.
The government has set a collection target for the Revenue Department of 1.77 trillion baht this fiscal year ending Sept 30, up by almost 10% from the previous fiscal year.
But Prof Sakon Varanyuwatana of Thammasat University's economic faculty said cuts in corporate and personal income tax should be of concern.
The government's revenue stream is in danger, as there are only 10 million tax filers out of a workforce of 35-38 million nationwide, and only 2 million of these 10 million are subject to paying any income tax, he said.
The Yingluck Shinawatra administration late last year approved a revamp in personal income tax by expanding tax brackets into eight from five by adding tax rates of 5%, 15% and 25%, effective this year.
The top tax rate decreased slightly to 35% from 37%.
Forgone revenue from the personal income tax cut is estimated at 25 billion baht annually.