The Revenue Department is the largest source of income for the Thai Government representing up to 80% of its revenues. Now as a result of the 2008 crisis the Revenue Department underperformed in 2009 (180 Billion Baht below target) while on the other hand the Government committed huge amounts of funds to support the economy increasing the public debt.
As a result of this unbalance the Revenue Department is looking for new solutions (i) to increase the tax base and to (ii) reduce tax fraud or avoidance.
Among the measures already announced to reduce tax fraud is
– The black listing and criminal pursuits of accounting companies that help their customers to increase their deductible expenses.
– The introduction of a VAT Withholding tax. Finally
– The creation of a nationwide network linking the Revenue Department to the Land Department, Local Administrations and Commerce Ministries.
Overall, businessmen and companies but also individuals may expect a difficult year ahead with a Tax Revenue Department that will become more omnipotent (as a result of the network linking) inquisitive and aggressive.
Note: This post is an excerpt of Rene Philippe Dubout next book: “How to Invest Safely Into Thailand” to be published in January 2010
About the Author:
The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.