Uttama eyes tax rejigs, not outright cut

Uttama eyes tax rejigs, not outright cut

Finance minister promises to streamline system and eliminate descrepancies

Tax reform has to come as a package so it's not possible to cut rates here and there without looking at the big picture, says Finance Minister Uttama Savanayana. (Bangkok Post file photo)
Tax reform has to come as a package so it's not possible to cut rates here and there without looking at the big picture, says Finance Minister Uttama Savanayana. (Bangkok Post file photo)

The Palang Pracharath Party (PPRP) never promised an outright reduction of income taxes during the election campaign as it merely meant to revise tax structures plagued with discrepancies, says Finance Minister Uttama Savanayana, who is also the PPRP leader.

He explained that the revision would involve looking at corporate tax, which is 20%, and personal income tax rates which range in seven steps from 5% to 35%.

“The tax structures should be streamlined to narrow the gap and parties connected to the matter should sit down together and work it out,” Mr Uttama said on Saturday.

“However, any revision must take into consideration fiscal discipline and effectiveness.”

During the campaign for the March 24 election, the PPRP raised eyebrows when it pledged to cut personal income tax rates by 10% in all brackets. Mr Uttama also said at the time that people earning less than 200,000 baht a year would be tax-exempt, up from the current tax-free threshold of 150,000 baht a year.

Other PPRP pledges made in March included a five-year personal income tax waiver for new graduates, and a two-year exemption for online vendors.

The party also promised a 400-baht daily minimum wage, without actually saying — as it did this week — that this would be phased in over the four-year term of the government.

Mr Uttama and numerous other ministers in the new cabinet have been busy talking up their plans ahead of the government’s presentation of its policies to Parliament next Thursday.

Among them was Energy Minister Sontirat Sontijirawong, who said he intended to expand the welfare scheme for power and fuel, including a special discount for low-income earners who hold the state welfare smart card. 

“The discount details and measures will be established on Monday,” he said, adding that he wanted to help ease people’s cost of living.

The price of compressed natural gas (CNG) for taxis, vans and buses is also being revised, as the current pricing scheme is designed to keep the price in line with market value. 

PTT Plc, the national oil and gas conglomerate, has ordered a subsidy for CNG prices under the state welfare scheme. 

Currently, if welfare cardholders consume less than an average of 50 kilowatt/hours of electricity per month at their residences, the government will waive their bill. 

“This measure will be extended up to 60 units per month,’’ said Mr Sontirat.

Cardholders will also be given 45 baht every three months to help them pay for cooking gas.

“The ministry will discuss an additional special discount for small companies and startups struggling with high operational costs,” he added. 

Mr Sontirat said the ministry also wanted to further develop biofuel to help make Thailand’s economy more competitive.

The ministry will keep and increase the levels of methyl ester, derived from crude palm oil, in biodiesel in order to absorb surplus palm oil production. 

“The ministry will mandate biodiesel B10 as the fundamental diesel at petrol stations and expand the availability of B20 for buses and trucks, as these biofuels can strengthen Thailand’s economy,” said Mr Sontirat, adding that the discounts of three baht for B10 fuel and five baht for B20 fuel, will be extended until July 31. 

A source from the ministry said the latest decision is likely to maintain the capped price of CNG for public transport, as well as the fee waiver for residents who consume 60 units or less per month of electricity. 

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