Cabinet approves registration
The government will enact a law requiring all entrepreneurs with sales of less than 500 million baht to register with the Revenue Department and maintain only a single financial account. The move is aimed at drawing business operators into the formal tax system.
Deputy Prime Minister Wissanu Krea-ngam said the cabinet yesterday approved in principle issuing the law, which is aimed at preventing tax dodging by unscrupulous business operators.
The cabinet also yesterday approved the Bank of Thailand's headline inflation target for 2016 at 1-4%.
Thailand currently has 2.8 million small and medium-sized enterprises (SMEs). Many have more than one financial account and submit the smallest one to understate tax liability.
Mr Wissanu said the new law would be issued soon to conform with the e-payment system.
In a move to draw SMEs into the formal tax system, businesses with registered capital not exceeding 5 million baht and revenue of not more than 30 million will be entitled to zero corporate income tax in the first year and only 10% of corporate tax in the second year from the usual 20%.
He said the government would not implement a tax amnesty for entrepreneurs who had avoided paying tax, but some leniency might be shown after they registered with the Revenue Department.
Finance Minister Apisak Tantivorawong said the government would ask the Education Ministry to help small entrepreneurs to conduct their accounts to meet accounting standards set by the Revenue Department.
The Federation of Thai Industries and the Thai Chamber of Commerce should also be urged to encourage their members to take part in the scheme, he said.
Mr Apisak said the purpose of prodding SMEs into using a single financial account was not just to raise more revenue but to enable them to manage costs and stock more efficiently.
The bulk of tax collection comes from three main agencies under the Finance Ministry -- the Revenue Department, the Excise Department and the Customs Department.
The current decline in oil prices will curb tax collection, notably in terms of value-added tax on imported oil and the petroleum income tax.
But cheap fuel could also spur consumption and lower the cost of doing business, which may make businesses more profitable and ultimately benefit the Revenue Department.
During the first two months of fiscal 2016, the Revenue Department collected 231 billion baht in tax revenue, 8.59 billion shy of the target.