Revenue Department seeks more authority
The Revenue Department must be allowed to request information from business operators to prevent avoidance of a levy on foreign-based online platform operators earning income in Thailand, says its chief.
Without the authority to ask for information, tax collection will be inefficient and could lead to tax leakage, said director-general Ekniti Nitithanprapas. Such a mandate helps several countries such as South Korea and Australia successfully collect e-business taxes.
A draft bill on e-business tax is now being deliberated by the Council of State and the Revenue Department will propose it to the new finance minister.
According to the bill, digital platform operators providing services (including online games, sticker downloads, online advertisements, digital content and online hotel bookings) that generate annual sales of more than 1.8 million baht in Thailand are required to register for value-added tax (VAT) payment and are liable for sales tax.
More business is undertaken through the online platform, which allows vendors to sell their products to buyers anywhere in the world and it is big challenge for tax-collecting agencies to adjust themselves to keep up with the change, he said.
Moreover, the Finance Ministry could also add withholding tax to the draft legislation on e-business tax, said Mr Ekniti.
E-business tax is aimed at leveraging a level playing field between local and overseas-based online platform operators.
He said the e-payment law will be the Revenue Department's tool to prevent local online vendors from avoiding income tax payment as it requires banks to report transactions of customer accounts that receive either more than 3,000 money transfers a year or at least 400 money transfers with a total value of at least 2 million baht a year to the department.
The new law would be effective from Jan 1, 2020.
If the Revenue Department spots non-salaried income, earners are subject to a tax for which they have two options: bulk payment of 0.5% of the income, or a personal income tax with five brackets in a range of 5-35%, whichever is higher, according to the law.
In related news, Mr Ekniti said the department will adopt data analytics for corporate taxpayers.
Any companies that have more cash transactions than electronic ones will be classified as a high-risk group for underreporting revenue, he said.