• 
• 

Published on September 19, 2007

Chulalongkorn University economics lecturer Nualnoi Treerat yesterday threw her support behind the Fiscal Policy Office's efforts to introduce the inheritance tax.

A preliminary study showed the tax rate could be 10 per cent on any estate valued at Bt10 million or more.

The study suggested the new tax was necessary, because income distribution had worsened. The study cited figures from the National Economic and Social Development Board (NESDB) showing the highest income group had 13.2 time more income than the poorest group during the 1990s.

Income equality in Indonesia is much better than in Thailand, because the richest have only 5.6 times more than the poorest.

"It's the right time for our society to debate whether to collect inheritance tax," she said.

Taiwan, South Korea, Singapore and Japan have imposed at least some form of tax related to the transfer of assets from parents to their children, including gift, inheritance and personal income tax derived from receiving an inheritance.

These countries impose a progressive tax rate of 2-50 per cent on the value of the inheritance.

Opponents of an inheritance tax argue it may discourage people from saving. Nualnoi counters that people save because they need money when they get older, and thus an inheritance tax imposed after they die would not negatively affect savings, she said.

Some supporters blame a lack of political will among the Thai elite for the many aborted attempts to adopt such a tax, she said.

Thanawat Polvichai, director of the University of the Thai Chamber of Commerce's Economic and Business Forecasting Centre, also backed the initiative but questioned the proposed 10-per-cent rate.

The tax exemption could also be raised to Bt100 million or even Bt1 billion, he said.

The NESDB recently also urged both the incumbent and the next government to pass an inheritance tax.

Finance Minister Chalong-phob Sussangkarn said more studies were needed before the new tax was adopted.

Wichit Chaitrong

 The Nation