Revenue Dept working group studies LTF tax breaks
A Revenue Department working group will look into how to deal with long-term equity funds (LTFs), on which tax privileges are scheduled to end next year.
Prasong Poontaneat, director-general of the department, said the working group, which has been studying exemptions for personal income tax for two months, expected to disclose details of its findings within this fiscal year ending September 2015.
The group is trying to work out who gains most from tax deductions on more than 20 items worth Bt1.5 million to Bt1.6 million per person per year, and what impacts these have on revenue.
The goal is to improve tax privileges so they benefit low-to-middle-income earners.
Major items needed for review include LTFs and retirement mutual funds. Investment in these can be used for tax deductions of 15 per cent of annual income but no more than Bt500,000 each.
Prasong said he believed LTFs remained a beneficial tool for savings and investment, but conditions may need improvement to ensure they are actually held for long terms.
At present, an LTF investment at any period of the year is counted as for the full year, and this has created a loophole for those using such funds as a tax-avoidance tool only. The loophole means the LTF investment period could be as little as three years and |two days, instead of five years as intended.
The department has lowered its target for revenue collection for fiscal 2015 to Bt1.805 trillion from Bt1.965 trillion, given the sluggish economy. In the first four months of this fiscal year, the department took in Bt475 |billion, about Bt16 billion lower than targeted.
