Tax Reform Discussions in Thailand Highlighted by Concerns Over Burden Distribution

BANGKOK: A recent parliamentary session in Thailand brought to light concerns over proposed tax reforms, with questions raised about who will bear the burden of a 15% tax rate. Ms. Sirikanya Tansakul, MP for the Prachachon Party, sought clarification on the matter, while Mr. Chulaphan Amornvivat, Deputy Minister of Finance, indicated that the proposal is still in the study phase and not a finalized policy. According to Thai News Agency, the discussion took place during the first meeting of the House of Representatives for the 2nd Ordinary Session of the Year, chaired by Mr. Paradorn Prisananantakul, Second Deputy Speaker of the House of Representatives. Ms. Sirikanya raised an oral question, originally intended for the Prime Minister, Ms. Paethongtarn Shinawatra, but answered by Mr. Chulaphan. She questioned the intentions behind the proposed tax reforms suggested by Mr. Pichai Chunhavajira, Deputy Prime Minister and Minister of Finance, which include reducing corporate and personal income taxes while increa sing value-added tax (VAT) to 15%. Ms. Sirikanya expressed concern that reducing corporate tax to 15% could lead to a decrease in governmental revenue, potentially impacting GDP negatively. She questioned the rationale behind reducing taxes that might cause ordinary people to bear more of the tax burden. Mr. Chulaphan responded that the Ministry of Finance is conducting a thorough study on tax reform, emphasizing that the ideas are part of a broader strategy to align with global trends, such as those outlined by the Organization for Economic Co-operation and Development (OECD). Mr. Chulaphan highlighted that the proposed tax reforms are aimed at creating a strong and stable economy with minimal impact on the populace. He noted that Thailand's current tax revenue compared to GDP is lower than the global standard, necessitating a review of the tax structure. He reassured that there is no definitive target or decision yet, and the 15% figure is merely a possibility under consideration. In response to Ms. Siri kanya's concerns about the lack of specific goals, Mr. Chulaphan reiterated that the proposals are still in the study phase and no concrete decisions have been made. He underscored the importance of setting appropriate tax rates considering Thailand's competitiveness and international obligations. The discussions are expected to continue in the parliament, allowing for further debate and examination. The session concluded with Ms. Sirikanya expressing skepticism about the lack of clear objectives and questioning the government's approach to attracting investment through tax incentives. Mr. Chulaphan assured that any actions taken would adhere to legal frameworks and that the matter would be revisited in the House of Representatives.