The Revenue Department is studying two options for the government's personal income tax cut campaign promise -- one an outright 10-percentage point cut across tax brackets and the other a 10% cut across brackets.
For the cut by 10 percentage points, individual taxpayers who are liable to up to 10% rates now will be exempt, while those with brackets of 15%, 20%, 25%, 30% and 35% will pay tax at 5%, 10%, 15%, 20% and 25%, respectively, said Ekniti Nitithanprapas, director-general of the Revenue Department.
Under the alternative, taxpayers' burden in each bracket will decline to 4.5%, 9%, 13.5%, 18%, 22.5%, 27% and 31.5%, he said.
Under the current personal income tax structure, taxable income of 150,000 baht or lower is exempt from tax. The rate is 5% for 150,001-300,000 baht, 10% for 300,001-500,000 baht, 15% for 500,001-750,000 baht, 20% for 750,001-1 million baht and 25% for 1,000,001-2 million baht.
The income band for the 30% bracket is 2-5 million baht, and the range for the top rate of 35% starts at above 5 million baht.
Both options mean the government will lose a hefty amount of income.
A personal income tax cut was a major campaign promise of Palang Pracharath Party, while revamping a tax structure plagued with discrepancies is high on the government's policy agenda submitted to the parliament speaker for debate.
However, the personal income tax cut has drawn criticism from politicians and academics for fear of losing high income.
Korn Chatikavanij, a parliament member from the Democrat Party and former finance minister, estimated the 10-percentage-point cut in personal income tax across brackets will cost the government 180 billion baht a year in foregone revenue, while the number of taxpayers will fall by 3 million to 1 million.
Lavaron Sangsnit, director-general of the Fiscal Policy Office, said the state agency will speed up its study on a tax structure revamp after Finance Minister Uttama Savanayana called for one that must take into account adjustments of corporate income tax and other taxes to avoid affecting the government's coffers and fiscal position.
The study must consider the impact on the government's income and which source of revenue can be used to offset such effect, he said.
Prasong Poontaneat, permanent secretary for finance, insisted the 2019 budget will be used to deliver the new government's policy and the stimulus package is sufficient.
The Fiscal Responsibility Act enables the use of the regular budget amid the delay in 2020 budget expenditure, he said.
A source at the Finance Ministry who requested anonymity recently said the ministry is looking to scale down the new government's populist campaign promises this year, given the constraints of the available budget and a delay in the fiscal 2020 budget process.