Tax agency to lose B165.5bn from aid deal
The Revenue Department estimates losing 165.5 billion baht in forgone revenue from tax measures under the government’s first-phase relief package to cushion impacts from the coronavirus contagion.
The department plans to soon discuss lowering its revenue target for this fiscal year with the Fiscal Policy Office.
Under the relief measures, a withholding tax cut to 1.5% from 3% during April to September is expected to cost 87 billion baht, and a 1.5-times tax deduction on interest incurred from soft loans for small and medium-sized enterprises (SMEs) during April to December is estimated to cost 500 million baht, said Ekniti Nitithanprapas, director-general of the department.
The department expects to lose 64 billion baht from the triple tax deduction on payroll to be paid by SMEs to employees earning up to 15,000 baht a month, Mr Ekniti said.
The estimated cost is based on data that there are 7-8 million workers with monthly income of no more than 15,000 baht, he said.
Letting individual taxpayers deduct an extra 200,000 baht for investment in Super Savings Fund units, of which 65% of net asset value is allocated to the Thai stock market, between April and June is expected to cost 14 billion baht in forgone revenue, assuming that 400,000 taxpayers take advantage of the perk.
Mr Ekniti said it will be difficult to achieve the department’s tax revenue target of 1.12 trillion baht for fiscal 2020, given the country’s floundering economy and tax measures to alleviate the virus crisis.
“At the moment, signs of falling tax revenue collection are starting to be seen," he said. "The department’s tax revenue in February fell short of target by 1.38 billion baht, mainly due to the decline in value-added tax (VAT).
"The department’s tax revenue still exceeded the target by 2.45 billion baht for the five months through February, but tax collection contributed to the strong revenue collection from the beginning of the fiscal year.
“The department could be tired of collecting tax for the remaining period of the fiscal year, but we will make an effort to avoid revenue collection below fiscal 2019's 2.01 trillion baht.”
Sommai Siriudomset, a spokeswoman for the Revenue Department, said recently that impacts from the coronavirus epidemic started to deal a blow to the Revenue Department’s tax income collection in February.
VAT on imported goods last month missed the target by 9 billion baht or 16-17% because of the country’s flagging economy and falling oil prices.
From October to January, the country’s largest tax-collecting agency garnered 540 billion baht — 0.6% higher than targeted but 2.8% lower than in the same period a year earlier.