Unclear where 2,300 extra staff will dig up revenue
The Revenue Department wants to recruit 2,300 tax collectors and invest Bt2 billion in the IT system as part of the Finance Ministry’s search for more income to compensate for the corporate tax cut and other populist schemes.
“If the proposal is approved, the Revenue Department assures that it could collect Bt157 billion more tax revenue in the first year and then increase this to Bt200 billion per year after three years of implementation,” Deputy Finance Minister Tanusak Lek-uthai said in an interview last week.
The ministry is also pushing the Government Lottery Office (GLO), Thailand To-bacco Monopoly (TTM) and Playing-cards Factory to market their products in the growing Asean market.
It would be great if a small investment in the department’s human resources and IT could bring high returns, he said. The estimated budget for the new staff is about Bt400 million a year.
However, the department should not try to go after small businesses such as food stalls or street vendors, like noodle soup vendors, he said.
“The proposal has not yet made it clear enough where it could find more tax revenue, so I will ask the department to come up with a more concrete plan,” he said.
Revenue chief Satit Rungkasiri has said he would focus on the emerging e-commerce trade, which is currently operating under the department’s radar.
If the department had a better-computerised system to monitor online transactions, it could boost tax collections, he said.
The Finance Ministry is under pressure to increase tax revenue or reduce the budget burden since the corporate income tax cut to 23 per cent this year from 30 per cent and then to 20 per next year will result in foregone taxes of over Bt100 billion during the course of three years from 2012-14.
The almost zero-per-cent tax on diesel has also resulted in revenue losses of Bt100 billion per year. The tax breaks for the first-car scheme will slash over Bt30 billion from revenue in the next few years.
The recent sin tax hike for cigarettes and liquor is expected to bring in only a little more than Bt13 billion in extra revenue a year.
The ministry has ruled out a raise in the value-added tax rate although many economists have suggested increasing VAT from 7 per cent at present, a relatively low rate, to 8-10 per cent.
Another source for more revenue is the profits of state enterprises, which have to transfer part of their annual earnings to the state’s coffers.
Tanusak said that he had asked the executives of GLO, TTM and Playingcards Factory to market their products in Asean countries as the region would become a single economic community by 2015.
Imported cigarettes have gained a market share of up to 20 per cent, which is worrisome.
“Premium imported cigarettes used to thrive in the local market. Now cheap products from other Asean countries have started to enter our market,” he said.
The GLO should also be able to sell more lottery tickets in neighbouring countries. Thai lottery tickets have gained popularity in the border cities of Laos and Myanmar.
By early next year, these three state enterprises should have detailed plans for how to sell more products in Asean, he added.