Hold-out SMEs face tax probes
ABOUT 150,000 small and medium-sized enterprises (SMEs) are facing scrutiny as a result of incorrect accounting records, leaving them open to the prospect of demands for back tax as well as investigations into money laundering, the Revenue Department said.
Speaking after a seminar, Prasong Poontaneat, the department’s director-general, said that half of the 300,000 or so SMEs that had registered with the department for its single accounting book project had followed the correct procedures.
Those SMEs that have not yet complied with the requirements of the single accounting book would be given a month to follow the rules, he said.
He said that those enterprises that still had multiple accounting books to avoid tax payments were engaged in industries such as consumer products, restaurants, lending enterprises, gold trading, pharmacies and car repairs.
“Previously, the Revenue Department didn’t want to act harshly without a period for operators to make the adjustment,” he said.
“We understand that businessmen have families to take care of. If we do anything harshly or use strict investigation measures without time given for adjustment, social impacts can arise.”
Some 600,000 SMEs are listed as juristic persons. Of that number, about 400,000 are continuing in their business operations. About 300,000 of these are required to pay tax and most of these operators avoiding tax payments have income of below Bt30 million.
Prasong said some operators of SMEs had claimed the department had no information on which to base their accusations against them. However, the department has such information at hand, especially with the growing trend for non-cash transactions, he said.
Tax avoidance amounts not only to misconduct against the Revenue Department's law, but also may point to money laundering, Prasong said.
Tax avoidance of at least Bt10 million carried out by a group could be categorised as money laundering and financial transactions through bank accounts could be traced, he said.
Efforts to encourage SMEs to participate in the formal tax system have brought positive effects for the government in the form of rising revenue, Prasong said.
The government has seen an increase in its value-added tax revenue collected from gold trading shops from Bt3 million a month to Bt100 million, as a result of policies to move them into the formal tax system. However, about 1,000 out of the 7,000 gold trading shops have yet to register as juristic persons.
From 2019, commercial banks will require an enterprise's accounting book for tax payment as financial documentation for loan requests.
