Local platform complains Facebook, Google gain advantage by avoiding Thai tax
A Thai digital trading platform owner has accused giant international counterparts of gaining an unfair competitive advantage by underreporting their revenues and profits in Thailand.
Pawoot Pongvitayapanu, CEO and founder of Tarad.com, said the government should press platforms such as Google and TikTok to accurately report transactions instead of focusing on getting them to invest in Thailand.
Pawoot cited figures from the Business Development Department (BDD) and the Digital Advertising Association (Thailand) (DAAT) to back his allegations. He said that the practice of underreporting gave the digital giants an unfair advantage over domestic digital platforms that carry out their businesses straightforwardly.
Other countries have also accused global digital giants of avoiding tax to gain a competitive advantage.
According to BDD, the four major foreign digital platforms reported the following revenues and profits in Thailand last year:
- TikTok: Revenue of 786 million baht and a profit of 46.9 million baht
- Facebook: Revenue of 463 million baht and a profit of 5 million baht.
- Google: Revenue of 1.336 billion baht and a profit of 59 million baht.
- Line: Revenue of 6.396 billion baht and a profit of 268 million baht.
The reported revenues were far lower than estimates given by the DAAT, Pawoot pointed out.
He said market research firm Kantar (Thailand) Ltd was hired by the DAAT to study advertising spending in Thailand last year and found that the four foreign social networks reaped huge advertising revenues.
The DAAT/Kantar estimated digital advertising revenues at:
- TikTok: 840 million baht
- Facebook: 8.691 billion baht
- Google 5.435 billion baht
-Line 1.633 billion baht.
Pawoot said foreign digital platforms could avoid reporting transactions in Thailand because clients often paid by credit card to their Singapore headquarters.
A total of 835 digital platforms in 15 business categories had been registered in Thailand as of September this year, according to the Electronic Transactions Development Agency.