Revenue collection for fiscal 2021 warrants concern because of the pass-through effect from this year's economic slowdown, says the Revenue Department.
The government set a target for fiscal 2021 revenue collection of 2.09 trillion baht, close to fiscal 2020's target of 2.12 trillion, said director-general Ekniti Nitithanprapas.
There were 11.2 million personal income tax filers last year, but only 4 million paid tax because the remainder had income below the lowest tax bracket. Moreover, 3.4 million tax filers requested personal income tax refunds.
In the personal income tax structure, taxable income of 150,000 baht or lower is exempt from tax, 150,001-300,000 baht is charged 5%, 300,001-500,000 baht is charged 10%, 500,001-750,000 baht is charged 15%, 750,001-1 million baht is charged 20% and over 1 million to 2 million is charged 25%.
The income band for the 30% bracket is over 2 million to 5 million baht, and the range for the top rate of 35% starts at income over 5 million.
Companies incorporated in Thailand are taxed on worldwide income. The corporate income tax is set at 20% of net profit for companies generating 3 million baht worth of annual net profit.
The pass-through effect of this year's economic downturn will have a direct effect on the department's target for fiscal 2021 revenue collection, said Mr Ekniti.
The fiscal 2020 revenue target assumed Thai GDP growth of 3.5%, but the economy is projected to contract by 8%, he said.
The department's revenue collection will reduce by 1.1% for every 1% of GDP contraction, said Mr Ekniti.
The nosedive is the most dramatic in more than two decades, as trade and tourism remain hobbled by the global pandemic.
The Thai economy contracted 12.2% in the second quarter year-on-year, the largest dip since the Asian financial crisis.
GDP fell a seasonally adjusted 9.7% in the second quarter compared with the previous three months.
For fiscal 2020, which ends on Sept 30, personal income tax and corporate income tax are crucial taxes for revenue collection, said Mr Ekniti.
The department previously postponed the filing of personal income tax and corporate income tax from March and May, respectively, to the end of August to provide relief and increase liquidity for individuals and business operators affected by the pandemic crisis.
The department plans to introduce a digital system designed for revenue collection starting on Oct 1.
A reduction of the withholding rate to 2% from 3% will be applied to juristic persons using the e-withholding tax system, and business operators will no longer need to store documents for tax filings.