ASEAN KEY DESTINATIONS
Thai corporate cuts may cut tax base
The Thai government may not be able to increase its tax base if Board of Investment incentives are scrapped or scaled back, as most companies that pay taxes receive BoI privileges, the agency warns.
"I think the BoI in fact gives a helping hand in providing a tax base from which the government can collect," said deputy secretary-general Songsak Limbanyen.
Even though the BoI waives corporate income tax for eight years, most companies do not receive full privileges since they do not turn a profit during the initial investment phase, he said. Therefore, the tax incentives are still beneficial.
It is also studying an act to promote Thai investment abroad with details expected this month.
Finance Minister Thirachai Phuvanatnaranubala said this week that tax system review would include BoI privileges.
"Many other countries offer fewer incentives to encourage investment and limit benefits only to industries deemed critical or beneficial to their economies," said Mr. Thirachai.
The BoI offers benefits to investors such as special corporate tax rates, waivers or deductions on duties for imported materials, and special deductions on utility expenses.
Tanit Sorat, a vice-chairman of the Federation of Thai Industries, agreed that reducing corporate income tax rates would do more harm than good to both the government and businesses.
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