Virabongsa's thinking on tax strategy is bad for poor Thais
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Ref: "Virabongsa calls for hike in VAT", Business, Saturday.
I disagree with Virabongsa Ramangkura, chairman of Prime Minister Yingluck Shinawatra’s advisory team, that taxation should be used not only for income generation, but also to reduce the gap between different groups’ standards of living.
Although a 1-per-cent VAT hike (from 7 per cent now to 8 per cent) could build up tax revenue of around Bt60 billion, it would affect the poor more severely than the rich. For the same product, the poor pay the equivalent of the rich. But as a proportion of income, they pay more taxes than the rich.
In addition, since the government still cannot deal with inflation in people’s real lives, a VAT hike would make the poor more unable to access necessary goods and services, and obviously increase the gap in standard of living between the poor and the rich.
SUTIPUNT BONGSUNUNT
KANCHANABURI
