The Revenue Department is poised to revise personal income tax deductions and allowances, saying that tax benefits from mutual fund investments should be adjusted.
Director-general Suthichai Sangkhamanee said high-income earners now reap excessive benefits from the current structure of deductions and allowances, particularly for long-term equity funds (LTFs) and retirement mutual funds (RMFs).
Individuals can deduct their investments in LTFs of up to 15% of annual income or 500,000 baht, whichever is lower.
The same condition applies to RMFs, but the combined maximum annual tax deduction for provident funds, pension insurance policies and RMFs together is 500,000 baht.
The tax privilege for LTF purchases is valid until the 2016 tax year. There is no deadline for the RMF tax break.
The tax benefits for tax-saving mutual funds have been available for several years and the Finance Ministry's goal seems to have been achieved, said Mr Suthichai.
The tax privileges for LTFs and RMFs were initiated by former finance minister Somkid Jatusripitak to increase the number of institutional investors and encourage savings among Thais.
Apart from RMFs, mortgage interest of up to 100,000 baht, life insurance premiums of up to 100,000 baht and 200,000 baht in pension insurance premiums are entitled to tax deductions.
The structure will be adjusted in line with current economic and social circumstances, he said without elaborating on details.
Mr Suthichai agreed to adjust some of the tax breaks rather than leave bulk segments of up to 750,000 baht a year as recently proposed by the department.
The new personal income tax structure took effect for the 2013 tax year for 2014 filings.
Tax rates expanded to seven brackets from five, adding new tax rates of 15% and 25%. Late last year, the cabinet approved new personal income tax rates of 5%, 10%, 15%, 20%, 25%, 30% and 35%.
The department may also double tax-deductible expenses for individual taxpayers to 120,000 baht.