August 20, 2014 01:00 By Suphannee Pootpisut The Natio
The Revenue Department will propose to the National Council for Peace and Order (NCPO) the draft inheritance tax law, which imposes tax ranging from 5-30 per cent on total registered inherited assets.
Registered assets that will qualify for the inheritance tax are house, land, automobiles, bonds and stocks – listed and non-listed stocks. Tax will not be levied on unregistered assets such as watches, amulets and collectibles.
Department director-general Prasong Poontaneat yesterday said the draft law was being looked at by the Council of State and would be later forwarded to the NCPO for approval.
The NCPO has already given, in principle, a green light for the inheritance tax law and assigned the Revenue Department to study the details.
Based on the proposal, inheritance tax ranging from 5-30 per cent will be collected from a person who inherits “registered” properties.
Prasong said that the law aimed at bringing fairness to society and reducing the gap between the rich and the poor, not just generating revenue for the state.
“We are not targeting revenue collection, as we do not know when there will be an inheritance,” he said.
Despite greater movement of capital and assets among countries, he believed there would be no impact on the collection of inheritance tax, as asset holders in a country will be required to pay tax in that country. The holders of cash or debt instruments in other countries finally are required to remit money or profit to the country.
“Our tax rates are at lower levels than in many other countries and I believe asset holders in other countries will, at one point, transfer assets to their descendants. There will be management or movement of assets back [to Thailand],” Prasong said.
According to the Revenue Department, studies on collecting inheritance tax have been conducted for more than 20 years and there have been arguments in support and against the idea.
Those who support the idea of an inheritance tax believe that persons who used local resources should pay tax to the government and heritage received after a death should be taxed.
Opponents of the idea believe this was an additional tax burden, as the assets have already been taxed and imposing an inheritance tax might discourage savings.
They also believe that collection of inheritance tax may not add to the state’s revenue, as administrative expenses on the tax collection may equal the revenue from inheritance tax.
Generally, the tax can be collected from both “inheritors”, called “inheritance tax”, and the “assets” to be inherited, called “estate tax”.