Shopping tax break seen lifting growth to 3%

Shopping tax break seen lifting growth to 3%

People shop at CentralWorld shopping complex in Bangkok on Saturday. (Photo by Wisit Thamngern)
People shop at CentralWorld shopping complex in Bangkok on Saturday. (Photo by Wisit Thamngern)

The Finance Ministry hopes an additional 22.5 billion baht will be circulated in the economy and boost 2015 economic growth to 3% as a result of the "Shopping for the Nation" campaign.

Some 3 million are taking advantage of the tax break during the last seven days of the year, Kulaya Tantitemit, executive director of the ministry's Macroeconomic Policy Bureau, said on Tuesday.

"The measure, as well as the recovering economy in the wake of the improving private-sector confidence index, will likely bring growth this year to 3%," she said.

Finance Minister Apisak Tantivorawong said there have been calls for the extension of the programme but the ministry was unlikely to oblige.

Revenue Department director general Prasong Poontaneat said whether the measure would be used again next year or in the future depends on government policies at the time.

The department estimated the programme would cost 5 billion baht in lost tax revenue.

The campaign allows taxpayers to deduct up to 15,000 baht spent on certain goods and services between Dec 15 and 31 from their taxable personal incomes.

Purchases must be made from a business registered in the VAT system in order for customers to be eligible for the windfall.

Eligible goods and services must also be bought or delivered during the seven days.

Customers will also have to ask for official receipts which show their names and addresses for their tax filing next year.

Based on the criteria, shoppers would enjoy tax savings in a range between 750 and 5,250 baht (see chart).

Tax returns under programme

Net personal income

(baht)

Personal income

tax rate

Maximum tax return

(baht)

1-150,000

Exempted

-

150,001-300,000

5%

750

300,001-500,000

10%

1,500

500,001-750,000

15%

2,250

750,001-1 million

20%

3,000

1,000,001-2 million

25%

3,750

2,000,001-4 million

30%

4,500

4,000,001 or more

35%

5,250


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