The government needs to revamp the tax structure, especially the personal income tax, to bridge the income gap and ensure a fairer system, according to the National Economic and Social Development Council (NESDC).
Thailand still has some tax waivers, including the capital gains tax, which some parties believe should be cancelled. The government is studying whether some tax waivers should be terminated, said NESDC secretary-general Danucha Pichayanan on Thursday at a media briefing on Thai society.
The NESDC presented a paper about personal income tax, which amounted to 338 billion baht in 2021, accounting for 13.2% of the country's total tax revenue. The amount increased from 301 billion baht in 2013.
The number of tax filers tallied 10.7 million out of 38.8 million total employees.
The government collected a low amount of personal income tax in recent years, according to the council. During 2013-2021, personal income tax accounted for only 2.09% of GDP on average, which is low compared with the average of 8.3% for countries in the Organisation for Economic Co-operation and Development.
One obstacle to using personal income tax as a tool to bridge the income gap is roughly three-fourths of employees are outside the tax system. Of the total 38.8 million workers, 18.6 million are in the formal sector, but only 10.8 million meet the criteria to pay tax.
The number of tax filers has declined since 2018, even as personal income increased, said the NESDC.
The second obstacle is waivers for certain types of high income, especially gains from share sales in local bourses.
In 2021, tax deductions cost the state coffers more than 110 billion baht, representing 51.8% of the personal income tax collected that year.
Mr Danucha said it will take more time for the government to reach a balanced budget in the future if the tax structure is not revamped and expenses adjusted to increase state revenue.
The NESDC also reported on the improving labour situation in the fourth quarter of last year.
Employment rose 1.5% year-on-year to 39.6 million total employees and 460,000 people listed as unemployed, the latter accounting for 1.15% of the labour force nationwide.