The cabinet has approved tax reduction measures for
social support and assistance to low and medium income earners and small and
medium-sized enterprises (SMEs), Finance Minster Somkid Jatusripitak
The finance minister said the measures, if successfully
implemented, would benefit the overall Thai economy since people would have
more money left for spending and saving. It would also help boost local
consumption, which could be used in place of state spending to drive the
country’s economic growth. More importantly, he said, the tax reduction
for SMEs would enable entrepreneurs to use money earned from the measures to
expand their business.
Sirote Swasdipanich, director-general of the Revenue
Department, said although the tax cut measures would cost the government
more than 8.2 billion baht; the revenue loss had already been set aside.
Under the approved measures, an amount subject to a
waiver on the personal income tax after deduction shall increase to 100,000
baht from 80,000 baht, applicable for incomes earned this year.
SMEs with a register capital of no more than 5 million
baht shall be subject to a corporate tax of 15% collected on net profits of
the first amount of one million baht, compared with 20% under the existing
tax collection system.
For net profits of more than that amount, they will be
subject to the same corporate tax rate of 15%, not to the progressive tax
rate, applicable for companies or partnerships established in the accounting
period on or after January 1, 2004. SMEs that earn revenue of no more than
1.8 million baht are not subject to value-added taxes.
The amount edges up from no more than 1.2 million baht
under the existing system. This is applicable for revenue earned from April
1, 2005 onward. (TNA)