But those in a hurry to spend their future windfalls are advised to show caution.
The government economics team led by Deputy Prime Minister Somkid Jatrusipitak has been keen to employ any tactic that might spur domestic spending.
High-income earners – those with annual income of between Bt4 million and Bt5 million after deductions and allowances – should benefit most under the new structure.
Apart from a deduction of Bt100,000 and allowance of Bt60,000 (up from Bt90,000 and Bt30,000 currently), this bracket enjoys a 5-per-cent cut, to 30 per cent tax.
Currently, those who earn between Bt2 million and Bt4 million a year are subject to 30-per-cent tax. Above Bt4 million, tax rises to the maximum rate of 35 per cent. But under the new structure, those who earn between Bt2 million and Bt5 million will be subject to the 30-per-cent rate. Meanwhile the 35-per-cent rate will only apply to those who earn more than Bt5 million.
In short, if you earn Bt5.16 million a year, you can save around Bt130,000 annually – a rise of Bt74,500. If you earn taxable income not exceeding Bt300,000 a year, you will be free from tax, although that only represents a modest saving of Bt3,600.
If that all sounds good, we shouldn’t forget that the new rates, deductions and allowances won’t be launched until the 2017 tax year, meaning that tax claims won’t be delivered until 2018.
Many are wondering why the government isn’t employing the new tax structure this year, though officials have explained that the 2017 date will ensure a balance is maintained between public revenue and spending.
Nevertheless, critics view the new rates as symptomatic of a lack of economic direction and a last-ditch bid to boost consumer sentiment in the hope of triggering a multiplier effect and boosting the economy.
Over the Songkran holiday, the government launched a campaign of tax benefits on food and tourism-related products priced up to Bt15,000, with a similar aim of boosting consumer spending. Authorities were happy at the success of the campaign, but ignored the fact that many of the shoppers who flocked to take advantage of the tax-back bonanza earned incomes short of the level required to pay tax.
Meanwhile high-income earners form only a small proportion of the total 10 million taxpayers but contribute most in tax payment.
If the government wants to create a multiplier effect for the economy, it has no need to delay the taxation changes.