Inheritance tax would encourage capital flight
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Re: "Inheritance tax would be an embarrassment for Thailand", Letters, November 12.
Further to Songdej Praditsmanont’s letter, I would like to point out some additional reasons for dropping the proposed inheritance tax (IHT), for which the Revenue Department has unsurprisingly declined to provide any forecasts of net revenues.
1. It will increase capital flight. The wealthy have many ways to transfer assets offshore below the radar of Thai authorities. This capital will never return to Thailand while IHT remains on the books.
2. Net revenues will undoubtedly be disappointing, due to tax avoidance schemes and the high costs of collecting the tax.
3. The Revenue Department will have to hire and train capable staff with the ability to analyse and appraise structures used by the wealthy to tie up their assets. Apart from the costs involved, the subjective process of valuing these assets this is likely to open the way for corruption.
4. Since net revenues are likely to be low and there is no clear plan to transfer them to the poor anyway, it is unlikely that the tax will do anything to reduce income disparity.
George Morgan
Bangkok
