Revenue Dept hopeful of success of SME tax incentives
THE Revenue Department expects almost all small and medium-sized enterprises that are actively operating as corporates to register within the tax system now that incentives to encourage them to register are in effect.
The incentive measures were approved by the National Legislative Assembly yesterday.
Currently there are 2.7 million SMEs in Thailand, 600,000 of which are operating in a corporate form, while the rest are individuals. Around 400,000 of the corporate SMEs are active.
“There is nothing for them to lose and there are only gains, so I expect almost 100 per cent, or around 400,000 active corporate SMEs, to register within the next two months,” Sompong Tantapart, deputy director-general of the Revenue Department told reporters at a department-arranged seminar to provide accounting firms with information about the measures yesterday.
He explained that of the 400,000 active SMEs, around 340,000 were expected to be operators with annual income of less than Bt30 million while around 80,000 had annual income of between Bt30 million and Bt500 million.
Sompong said that if more SMEs were registered within the tax system, the Revenue Department would be able to provide more benefits from an increase in income-tax collection, and the corporate income tax could be further lowered.
At present, the corporate-income-tax rate is 20 per cent.
“We have made an understanding with around 10,000 accounting firms today [via the seminar and video conference] and they are currently handling the accounts of around 300,000 active SMEs, which should cover most of our target group already,” he said.
The two-month tax incentives conclude on March 15 and include a promise not to investigate SMEs for back taxes if they agree to register within the tax system during the given period of time.
SMEs that are currently being investigated are also eligible to register and receive the tax incentives, as the authority will only look into the tax records of the year that is currently being investigated.
An SME is defined as a business that reports sales and other revenues of Bt500 million or less per year.
SMEs with registered capital of no more than Bt5 million and annual revenues of Bt30 million or less will also be exempt from income tax in the 2016 accounting year and are subject to a reduced rate of 10 per cent in the 2017 accounting year if they agree to pay taxes properly.
SMEs that have registered and received the tax incentive will, however, be subject to a back-tax investigation if they fail to pay tax properly.
Companies that fail to register for tax payment between January 1 this year and December 31, 2019, will not be able to apply for loans from commercial banks, since the banks will require a tax record that is approved by the Revenue Department before considering a loan.
SMEs must also have a single business account when applying for loans from January 1, 2019, onwards.
