Some comments about the inheritance tax

This report was interesting but the speakers’ comments at the seminar were questionable.

First, the economic lecturer guessed that Bt300 bn of inheritance tax (IHT) could be potentially collected from 50 richest persons. This is questionable because IHT is imposed upon someone’s death and how could she (the lecturer) know that these 50 individuals would all die in the next fiscal year. 

Second, she maintained that it could not reduce inequality because of the lack of progressive tax rates. That contention is naive since the target is those with more than Bt50 million where no economist would be concerned with inequality among this lot. Inequality is not erasable because of loopholes in inheritance tax laws. IHT is known as looking to tax the rich but in reality is not significant enough to cure wealth inequality. This was admitted by the proposer, who himself even branded the tax as a gimmick.

Third, one stockbroker speaker suggested that loopholes should be closed. The loopholes, which are plenty, can never be completely eliminated because they in substance are mostly lack of audit trails. 

Fourth, he also opined that the property law may not pass because those meant to pass it (in parliament) own many pieces of land. But, so far, members of National Legislative Assembly have shown least opposition to any proposed law.

Finally, previously the draft IHT was meant to apply to assets that are on record. The latest draft applies to all assets of the deceased including jewellery, gold bars and surplus cash at home. When asked how could the authority monitor such unrecorded assets, the answer was that the authorities would rely on the good faith of beneficiaries. That is nice.

Yours sincerely,

Songdej Praditsmanont

Bangkok