The Revenue Department's collection target for the next fiscal year is set to be slashed because of lingering impacts from the pandemic, says the department chief.
The Finance Ministry will hold a meeting this week to lower the tax revenue collection target for fiscal 2021, which was set based on this fiscal year's target of 2.12 trillion baht, said director-general Ekniti Nitithanprapas.
"We expect to fall short of this fiscal year's target, so the 2021 target should also be revised," he said. "We will continue to work hard [in the next fiscal year], but with the ripple effect from Covid-19, we need to monitor the situation."
As corporate income tax to be paid next year is based on companies' financial performance this year, and most sectors have been battered by the pandemic, achieving the revenue target for fiscal 2021 will be difficult, Mr Ekniti said.
Personal income tax could also be hit after millions had their working lives upended, he said.
The tourism sector, which is labour-intensive, has borne the brunt, and many workers in the industry have lost their jobs while salaries have been frozen, inevitably affecting the department's income.
Based on a rough estimate that tourism receipts represent 15-16% of GDP, the department's income will fall by the same ratio, Mr Ekniti said.
Fiscal 2020 runs from Oct 1, 2019 to Sept 30, 2020.
Although the department has managed to increase the number of individual tax filers from 10.6 million to 11.4 million, only 4 million are liable for income tax bills, which is considered a low base for a workforce of over 30 million, Mr Ekniti said.
Department regulations require those earning income of at least 60,000 baht a year in Thailand to file personal income tax returns, though their income is tax-exempt up to a limit.
To alleviate the effects of Covid-19, the department accelerated paying back excess income tax payments and postponed tax return filing deadlines for individuals and companies, aiming to keep them liquid as long as possible.
The department has already paid back personal income tax to 3 million taxpayers, representing 95% of those who filed tax returns.
For the first seven months of the fiscal year through April, the department's revenue collection missed its target by 70 billion baht.
Mr Ekniti said estimating the revenue shortfall for this fiscal year is difficult because of the postponement of the filing deadline.