By Pichaya Changsorn
The Finance Ministry will resort to adopting a number of carrot-and-stick measures in a bid to combat widespread tax evasion, including a prize-draw scheme linking value-added tax invoice numbers to the government lottery results.
This means there will be a monetary incentive for taxpayers to keep VAT invoices for possible lottery-like wins.
Finance Minister Sommai Phasee said yesterday that considering the current unfavourable economic conditions, the ministry would avoid creating more financial burdens on middle- and lower-income earners.
It will, therefore, shortly propose to the Cabinet the postponement for another year of a plan to raise the VAT rate from the current 7 per cent to 10 per cent, he said.
However, the government needs to cover the tax-revenue shortfall resulting from such a postponement, which would otherwise bring in an additional Bt80 billion annually for every percentage-point hike in the VAT rate – Bt240 billion if it were to rise to 10 per cent.
One of the measures aimed at achieving this is to close a major tax-collection loophole by offering incentives to all taxpayers to ask for VAT invoices.
In addition, Sommai said the ministry would focus on enforcement of the law to ensure that tax evaders face stiff penalties, including imprisonment.
The ministry’s target is to get an additional Bt100 billion-Bt200 billion in tax revenues from closing loopholes, representing 5-10 per cent of overall tax collection, which amounts to more than Bt2 trillion annually, he added.
Over the longer term, the target is to increase the country’s tax-revenue base from 17 per cent of gross domestic product to at least 20 per cent of GDP. To expand the tax-collection base, Sommai said his ministry would soon submit to the Cabinet a plan to introduce a property tax, which is expected to generate Bt200 billion of additional annual tax income to the state.
“Do you think I have given up on the property tax proposal?” said the minister, adding that he would definitely go ahead with the controversial levy while in office.
On inheritance-tax collection, he said the revenue generated from the measure annually was estimated to be to the tune of just a few billion baht, much less than from the planned property tax.
However, each household will be required to pay just a small amount in property taxation, which will be comparable to the bills on their pay-TV packages, he stressed. Meanwhile, Sommai said Thai interest rates had already fallen to the “floor” and were at the lowest level in Asean.