Dept told to watch for corporate tax avoidance 

Economy April 21, 2017 01:00

By   THE NATION

THE FINANCE Ministry has assigned the Revenue Department to boost tax-collection efficiency and keep an eye on corporate taxpayers, given lower-than-targeted revenue collection from them for the past three to four years. 



Somchai Sujjapongse, the ministry’s permanent secretary, said that if large companies accounted for less than 70-80 per cent of total corporate income tax collected as targeted, the government’s overall revenue would be negatively affected.

Earlier, all three revenue-collection departments were assigned to formulate plans to increase efficiency after they missed their targets. 

The ministry now has urged the Revenue Department to analyse the causes of lower-than-targeted revenue collection from large business operators and improve its collection efficiency by way of monthly reports, starting now.

Somchai said that although large business operators, particularly listed companies, had accounting and auditing systems in place, there could be loopholes, particularly in transfer pricing between a parent company and its subsidiaries, to avoid taxes. 

Fraudulent tax rebates and groups that avoid paying taxes must be kept under close watch, he said.

“We have to keep pace with large business operators, given the ways to avoid tax payment. In the United States or Europe … caution is taken for transfer pricing between a parent and its subsidiary, as it’s a way to avoid paying tax,” Somchai said.

Somchai also asked the Revenue Department to study the reasons for lower tax payments by business operators that had witnessed wider margins as a result of lower costs after drops in crude-oil prices while prices of their own product remained the same.

According to the ministry, the Revenue Department’s corporate income-tax collection has stayed in a range of Bt550 billion to Bt600 billion per annum for the past five years. It collected Bt544 billion in 2012, Bt592 billion in 2013, Bt570 billion in 2014, Bt560 billion in 2015 and Bt600 billion last year. 

For the first five months of this year, corporate income-tax collection totalled Bt150 billion.

The department’s total revenue collection amounted to Bt616 billion for the first five months of this year, about 1.3 per cent or Bt8.4 billion lower than its target. However, the figure was 3 per cent or Bt17.8 billion higher than in the same period in 2016.

Of all taxes collected, value-added-tax collection missed its target by 3.4 per cent or Bt10.8 billion.

February’s VAT collected from the manufacturing expanded for the first time this year, signalling an improved economy, while VAT collected from imports gained from a rise in imports of raw materials and semi-finished products.

Petroleum-tax collection totalled Bt1.89 billion, about 70.9 per cent or Bt4.6 billion below its target and 63.2 per cent less than that in the same period of last year.