The Revenue Department has started to send notification letters to online merchants that have income at the threshold of personal income tax liability.
The objective is to integrate these people into the tax base, said director-general Ekniti Nitithanprapas.
The response from online merchants who have received the notification letters has been mostly positive, said Mr Ekniti.
The Revenue Department’s tax base saw an increase of 140,000-150,000 taxpayers in fiscal 2020, ending on Sept 30.
The tax base for personal income tax has 11.3 million taxpayers in total.
The department wants to pull in as many people involved with online businesses to the tax base as possible, he said.
For e-commerce business in 2020, growth is expected at around 35% year-on-year for a value of 220 billion baht, said the department.
“We believe online merchants want to be included in the tax system, and we have to make the system easier and more convenient for them,” said Mr Ekniti.
If these entrepreneurs integrate into the tax system, it would enhance their growth opportunities more than if they remained outside the system, he said.
The department’s objective is not based on the amount of tax money collected from e-commerce, but rather the number of online entrepreneurs integrated into the tax system, said Mr Ekniti.
He said tax evasion has become more difficult because the department’s internal system is connected with several organisations, meaning many transactions are visible.
Data analytics are used to assess the source and amount of income entrepreneurs make, said Mr Ekniti.
Regarding the drafting of the e-service tax bill, which is being deliberated in parliament, the law will help ensure fairness to all entrepreneurs in Thailand because overseas business operators, who offer services ranging from digital entertainment to logistics, will be liable to pay 7% value-added tax (VAT), he said.
The department classifies businesses operating on the digital platform into five groups: overseas e-commerce platforms; digital advertising platforms; digital sales agencies (such as online ticket sales); peer-to-peer services (such as ride-hailing and food delivery services); and businesses that provide downloading and uploading services for music and films.
Once the law takes effect, there will be an online system in place for VAT registration by overseas business operators, said Mr Ekniti.
The law is anticipated to come into effect during the middle of fiscal 2021, which ends next September.