Wealthy would pay more tax under new proposals changes aimed at making up for cut in corporate incom
Higher-income groups would be taxed more under a proposed legislative package that would revamp the personal-income tax structure, said Somchai Sujjapongse, director-general of the Fiscal Policy Office.
The office is also pushing ahead with its land and property tax bill, which aims to collect more revenue from wealthy property owners.
Somchai said the package is expected to be submitted to Finance Minister Thirachai Phuvanatnaranubala in the next two weeks.
Changes to personal income tax rates are needed in light of the government’s planned reduction of the corporate income tax rate to 23 per cent next year and to 20 per cent from 2013, he said.
“The tax burden on low- and middle-income groups may be reduced, while higher-income groups may need to pay more,” Somchai said.
Under the new package, the annual minimum income subject to taxation may be raised to Bt500,000 – or even Bt1 million – from Bt150,000, he said.
Raising the taxable income threshold will benefit low- and middle-income groups, he said. Those who earn Bt150,000 or less are currently exempt from income tax. Those in the Bt150,001-Bt500,000 income bracket are taxed 10 per cent; those in the Bt500,001-Bt1 million bracket 20 per cent; the Bt1,000,001-Bt4 million bracket 30 per cent; and the above-Bt4 million bracket 37 per cent.
Somchai said the Finance Ministry is considering ending some tax breaks, which currently number 22. This list is too long and existing breaks tend to favour high-income people, he said.
Among the items on the list are deductions of mortgage interest payments, investments in long-term equity funds and annual life-assurance premiums.
Somchai said the office would also push for passage of the land and property tax bill, which failed to pass into law during the previous Abhisit Vejjajiva government due partly to an early dissolution of Parliament.
Officials have tried for several years to impose a tax on landlords, but they have not been able to win approval from lawmakers.
The government is under pressure to collect more taxes to finance its populist policies, state welfare schemes and public investments.
Critics blame previous failures to pass the bill on politicians and their cronies who opposed it because it would draw money from their pockets.
This has been contrasted with recent statements by prominent wealthy figures in the West who have asked their governments to collect more taxes from them, as a way of helping to ease public-debt crises in their countries.
