Customs urged to seek solutions for tax waivers
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Customs urged to seek solutions for tax waivers

The Finance Ministry has ordered the Customs Department to step up its search for ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht, saying such measures are hurting small and medium-sized enterprises (SMEs).

According to Patchara Anuntasilpa, director-general of the Customs Department, the department may consider measures similar to a non-tariff barrier to help protect domestic SMEs from low-priced imports that enjoy import tax and VAT waivers.

Under customs regulations, the import of parcel posts from foreign countries worth no more than 1,500 baht per piece is allowed to be exempt from import tax and VAT.

In international practice, such express parcel post is tax-exempt.

Mr Patchara said any efforts to collect tax from imported goods with relatively low prices have to utilise other tax laws, not those relating to customs.

Online trade is thriving, with cross-border purchase orders via e-commerce increasing every year.

The import of express parcel post now amounts to about 35 million parcels a year, with the value of imported goods standing at around 20 billion baht.

Of these 35 million parcels, more than 27 million items have an import value of less than 1,500 baht.

He said the department projects charging VAT on the 27 million items with an import value of less than 1,500 baht would generate about 700 million baht, which it considers an "insignificant" amount.

Exempting such low-priced import products from import tax and VAT creates an unfair playing field for local SMEs, which have to pay VAT in accordance with Thai law, said Mr Patchara.

"The concerned parties will try to finalise details on the measures as soon as possible," he said.

The Revenue Department previously proposed the Customs Department work to remove the VAT exemption for goods worth up to 1,500 baht per parcel imported via the postal system to level the playing field for local vendors, particularly SMEs.

However, Customs said a major barrier hampering any cancellation of the exemption is the difficulty in screening and examining the contents of the millions of parcels imported into the country every day.

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