The Revenue Department has proposed to the National Council for Peace and Order that the current 7% value-added tax (VAT) rate be extended for another year and that a royal decree be issued to set the corporate income tax rate permanently at 20%.
Revenue Department director-general Sutthichai Sungkamanee said on Monday his department proposed that VAT to be extended at 7% for another year from Sept 30, 2014. The VAT ceiling is set by legislation at 10%.
The department also proposed that corporate income tax, that was gradually cut from 30% to 20%, stay at 20% permanently.
The department will propose that the seven-tiered personal income tax structure, with the highest rate at 35%, be extended for another year from Dec 31, 2014, so that authorities have enough time to work out a more suitable tax structure for permanent implementation.
Mr Sutthichai said the maximum rate of 35% should be lowered because it discouraged people from paying income tax. The rate in Singapore was lower and most people there paid tax and filed income tax returns.
The Revenue Department was studying a more suitable tax structure to encourage people to pay taxes. At present, only two million people file income tax returns, Mr Sutthichai said.
The department will also propose the doubling of an individual's tax deductible expenses from 60,000 baht to 120,000 baht per person per year. Tax payers would be required to present tax invoices to claim the additional deductible expenses. This would help persuade more people to enter the taxation system, Mr Sutthichai said.
The Revenue Department will also propose new tax incentives for people investing in long-term equity funds (LTF) and retirement mutual funds (RMF), he said.