Small businesses offered costs carrot to upgrade legal status
THE country’s ranks of small-business owners, believed to be as many as 800,000, are being encouraged to register their operations as corporate entities and enjoy lower business costs.
The Revenue Department issued the call as its director general, Prasong Poontaneat, also said the department is investigating suspected tax evasion at a controversial market in Don Mueang district.
Prasong yesterday met 250 representatives of accounting firms in Bangkok and broadcast the conference to tax officials and accountants nationwide. He called on the accountants to support the department plan’s by passing on its advice to their clients.
With as many as 800,000 small businesses operated by individuals or families across the country, the department wants their owners to register the businesses as corporate entities.
The government has extended tax allowances for them until the end of this year. They will be exempted from value-added tax payment, Prasong said.
In an effort to assuage concerns over tax payments at a rate, Prasong assured the accountants that their clients would benefit greatly from the new status.
Individuals pay personal income tax at rates between 5 and 35 per cent, depending on their income. The first Bt150,000 in income is exempted from tax.
However, small businesses will be exempted from tax for the first Bt300,000 booked as profits.
Amounts between Bt300,000 and Bt3 million will be subject to a tax rate of 15 per cent. Profits that exceed Bt3 million incur the top rate in corporate income tax of 20 per cent.
Most small businesses pay at only the 15 per cent rate, Prasong said.
“We aim to bring more than 100,000 of them on board,” he said. The target groups include retailers, gold and jewellery traders and sellers of construction material.
Prasong said the owners of pharmacies are awaiting a change of regulations at the Public Health Ministry that will enable an automatic process for the changeover in licences from individual ownership to corporate entities.
The Revenue Department has in recent years launched campaigns for businesses to register as corporate entities, but it estimates that only 70,000 business owners have switched over to the status of company, ordinary partnership or limited partnership.
Among the 17,000 gold traders, 15,000 of them have recently registered as corporate entities, said Prasong.
In a related development, tax officials are investigating allegations of tax evasion by traders at the “Talatmai Don Mueang “market, where police have been investigating into substandard food supplements and cosmetics products. There have also been allegations of mafia figures extorting money from traders. Prasong warned that tax-collection efforts would be stepped up, resulting in severe penalties against offenders, including asset seizures.
