Monday, October 26, 2020

Revenue Dept braces for huge hole in annual tax revenue

Aug 25. 2020
Ekniti Nitithanprapas, director general of the Revenue Department
Ekniti Nitithanprapas, director general of the Revenue Department
Facebook Twitter

By The Nation

Worried about a potentially sharp drop in tax income as the economy shrinks, the Revenue Department has urged people to file their tax returns before the August 31 deadline.

The department will fall short of its Bt2 trillion tax-collection target for the 2021 fiscal year (October 2020 to September 2021), said Ekniti Nitithanprapas, director general of the Revenue Department.

The announcement comes amid hot public debate over whether Thailand should spend Bt22.5 billion to buy two more submarines – a deal approved on Friday by a House subcommittee vetting the budget bill.

Ekniti said that this year’s revenue from personal and corporate income tax and corporate would be in line with the economic contraction. The targeted revenue of Bt2 trillion is based on a previous projection of 3.5 per cent economic growth this year.

“Every 1 per cent of economic contraction will reduce tax revenue by 1.1 per cent, and the economic outlook is on a downward trend with a new projection of 8-per-cent contraction,” said Ekniti. 

Those figures would leave total tax revenue about Bt176 billion short of the target this year.

“Against this backdrop, we cannot meet the target, so the Finance Ministry’s Fiscal Policy Office must revise its tax revenue target for the 2021 fiscal year while we wait for the figure at the end of this month,” he said.

So far this year, 10 million of Thailand’s 11 million taxpayers have filed their tax returns, with 3 million people receiving total refunds of Bt33 billion. Meanwhile 200,000 out of 500,000 corporate taxpayers have submitted their returns and been refunded Bt30 billion.

“Both individuals and corporates must file tax returns within the deadline at the end of this month, with a penalty of 1.5 per cent of their bill if they fail to do so,” he said.

Those unable to meet their tax obligations will be allowed to pay in three instalments, he added.

The 2021 budget has been set at Bt3.3 trillion, against projected net revenue of Bt2.777 trillion, resulting in a deficit of Bt523 billion, or 2.8 per cent of GDP. The budget bill must now pass scrutiny and a vote in Parliament. A larger than expected revenue shortfall will lead to a larger budget deficit.

Facebook Twitter
More in Business
Editor’s Picks
Top News