Tax shortfall to be addressed

Tax shortfall to be addressed

The Revenue Department is poised to tighten scrutiny of tax payments by wealthy owners of businesses with weak earnings as part of efforts to seek higher tax revenue. This follows its estimation that revenue for this fiscal year will have the biggest shortfall in seven years.

Mr Suthichai will scrutinise wealthy owners of weak firms. PAWAT LAOPAISARNTAKSIN

The department plans to inspect personal income tax paid by business owners in parallel with corporate tax paid by their companies to determine whether their tax payments are justified, said director-general Suthichai Sangkhamanee.

The idea was initiated after the department found some companies with few assets had owners or directors who could afford to buy 40-million-baht homes.

He said the department would inspect tax payments with fairness, with tax inspection extending to politicians.

The department recently estimated it would collect only 1.76 trillion baht, about 7% short of the 1.9 trillion targeted for fiscal 2014 ending Sept 30. Lower-than-targeted collection of value-added tax (VAT) on imported products will contribute to the shortfall.

For the first six months of the fiscal year, the department’s 705 billion baht in revenue fell 23 billion short of target, 18 billion of which was a shortfall on imported goods VAT.

Overall government revenue for the first five months missed the target by only 0.6%, as higher revenue contributions from state enterprises and government agencies almost offset the lower-than-expected tax collections.

Its revenue during the October-February period stood at 803 billion baht, 4.67 billion lower than target and down by 3% year-on-year.

Months of political uncertainty coupled with the economic doldrums have stoked worries that government revenue for fiscal 2014 will miss the target set at 2.275 trillion baht.  

Mr Suthichai said the Revenue Department also plans to spend 50 million baht to link demographic data from the Provincial Administration Department and electricity consumption data from both the Metropolitan Electricity Authority and the Provincial Electricity Authority for better inspection of tax evaders.

The department has lunched a pilot project to ascertain whether electricity use of each household in Soi Ari of Phahon Yothin Road is appropriate with the tax payments of residents in the area, he said.

Electricity consumption is a determinant of business activity. Those earning high incomes always consume more power than do middle- or low-income earners.

Moreover, the department will pre-audit the 100 largest corporate tax payers ahead of the tax filing season next month to inspect tax payments more prudently.

To become more flexible and independent in tax collection, the department will propose it become independent of the Finance Ministry, Mr Suthichai said.

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