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Cost Of Thailand's Planned Corporate Tax Cut Put At USD5bn

by Mary Swire, Tax-News.com, Hong Kong

08 August 2011


The Director General of Thailand’s Revenue Department, Satit Rungkasiri, has disclosed that it has been estimated that the new government’s corporate tax reduction policy will reduce the country’s tax revenue by some THB150bn (USD5bn) in the three fiscal years from 2012 to 2014.

The Pheu Thai party, and the next Prime Minister Yingluck Shinawatra, won a large majority in last month’s election by promising government policies that included a national daily minimum wage of THB300, an increase of some 90% over current levels, and, to relieve the consequent increase in business costs, a reduction in corporate income tax from its present level of 30% to 23% in 2012, and 20% in 2013.

Satit revealed that such measures would reduce corporate tax collections by some THB45bn in 2012, THB70bn in 2013 and THB35bn in 2014. It is hoped that, thereafter, corporate tax revenue would climb back to its current level as new investment was encouraged and economic activity stimulated, while tax avoidance levels would be decreased.

It is also reported that, in Satit’s opinion, personal income tax rates would not be altered in the short-term. However, it has been said the current 7% rate of value-added tax could be allowed to rise to10% in September 2012, as had been scheduled by the previous government.

TAGS: tax | economics | value added tax (VAT) | fiscal policy | corporation tax | Thailand | tax rates | individual income tax

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