Reduced personal income taxes next year

People earning less than 26,000 baht a month pay no tax in 2017 under new tax law to encourage spending.


Reduced personal income taxes next year

Chatrudee Theparat & Wichit Chantanusornsiri

New changes to personal income taxes will come into effect next year.

The cabinet approved on Tuesday the restructuring of personal income tax as proposed by the Finance Ministry.

Each of the new tax reductions that will come into effect is being made for a specific purpose.


Tax reductions for middle - income earners are expected to make them spend more money.

Tax reductions for taxpayers with families are to encourage them to have more children.

Tax reductions for high-income taxpayers reduce personal income tax rates to the same level as corporate taxes to encourage these owners of businesses not to keep their money in the corporation in order to avoid paying higher personal income taxes.

Overall, the government is expected to lose about 32 billion baht in revenue from the new tax structure.


People making less than 26,000 baht a month on average will be exempt from taxes (tax-exempt) under a new personal tax income structure to take effect in 2017 for 2018 tax filings.

General expenses equal to 50% of income can be deducted but not more than 100,000 baht, compared to 40% and up to 60,000 baht currently. The general deduction was also doubled to 60,000 baht. 

It is expected that higher expenses and personal tax allowances will also ease the tax burden for middle-income taxpayers and encourage them to spend more, enabling the government to collect more in value-added tax (VAT).


The child tax deduction was raised to 30,000 baht each with no limit on the number of children compared to 15,000 baht each and the cap at three children currently.

The government aims to encourage Thais to have more children because of the country's ageing population.


The new personal income tax structure aims mainly to attract high-income earners to pay more in personal income tax.

According to Mr Apisak, currently only 20,000 of the total 10.3 million taxpayers are subject to the highest 35% rate.

He said that many high-income earners do not want to pay personal income tax as it is much higher compared with corporate tax for which the gross burden is about 28%, encouraging personal income tax evasion.

According to the new tax structure, the overall personal income tax burden, including higher allowances, of a top-rate taxpayer will be reduced to 29%, close to that of corporate income tax.

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Writer: Jon Fernquest
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