Revenue Dept. uses ‘carrot and stick’ to encourage dodgers to pay taxes

Thailand’s Revenue Department is employing a ‘carrot and stick’ approach to persuade about three million income-earners and about 140,000 entrepreneurs, who have never paid income taxes, to pay up.

Revenue Department director-general Ekniti Nititanprapat told a meeting of senior revenue officials today that the department has set a target of tax collection for next year at 2.11 trillion baht, against this year’s target of two trillion baht.

He said that the tax base for personal and corporate income taxes will be expanded and this means that the number of personal income tax payers in the department’s records will increase by 10%, from the present 11.7 million.

Noting that there are still 3-4 million income earners who are outside the tax system, Mr. Ekniti said the department is employing a carrot and stick to persuade them to pay, failing that they will face legal action.

Likewise, he said there are about 140,000 entrepreneurs who are yet to pay corporate income taxes, out of about 600,000 business operators registered with the Commerce Ministry.

He insisted that the Revenue Department is not chasing after every income-earner to squeeze taxes out of them, but merely wanted every earner, who has earned enough income to be taxable, to pay taxes for the sake of fairness.

Corporations, which generate between 500 million and 2 billion baht a year, pay 15% of the taxes received by the department and they represent just one percent of the corporate tax payers.

The bulk of businesses, which are the SMEs, scarcely pay tax or do not pay tax at all.

Mr. Ekniti added that the department is urging speedy enforcement of the E-Business Act, so that the department can tax online business operators which have registered their businesses abroad, but operate and generate revenue in Thailand.


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