The Finance Ministry on Monday denied that the government's "Khon La Khrueng" co-payment subsidy scheme was a tool to tax small vendors.
Pornchai Thiraveja, director of the Fiscal Policy Office (FPO), said operators, regardless of whether or not they join the co-payment scheme, are legally required to pay income tax if their earnings reach a certain level.
He said the amount owed will depend on their net income after deductions including operations costs and personal expenses. However, those whose incomes remain below a certain threshold with remain exempt.
The clarification came after a number of participating vendors complained of being charged back tax and decided to opt out of the scheme, refusing to receive further payments via the e-wallet service.
Mr Pornchai stressed that the government had launched "Khon La Khrueng" co-payments with the intention of helping people reduce their daily expenses as well as giving the economy a boost from the expected ensuing increase in spending.
Pornchai: 'Taxes a legal requirement'
Nevertheless, he said operators with annual earnings exceeding 1.8 million baht are also required to register for value-added tax payments with the Revenue Department, although the two databases are not yet linked after the "Khon La Khrueng" scheme concluded on April 30.
According to the FPO, more than 70.45 billion baht has been spent under three government subsidy schemes designed to help reduce the cost of living and stimulate the economy.
The fourth phase of a scheme to increase the purchasing power of state-welfare cardholders saw total spending of 7.91 billion baht among 13.37 million participants.
The second phase of a scheme for those who need special aid saw total spending of 704.9 million baht among 1.31 million participants.
And the fourth phase of the "Khon La Khrueng" subsidy saw total spending of 61.8 billion baht.