Thai spenders must listen carefully when General Prayuth’s government announced new economic policy as the New Year present to his citizens. Today is the fourth day after Finance Ministry’s tax rebate incentive was launched. The most recent tax-deduction measure will be applied for any purchase made during December 25th - 31st, 2015 which is worth up to 15,000 baht. Taxpayers will enjoy the tax-saving benefit up to 750 baht – 5,250 baht depending on the range of their yearly income. Those who earn net personal income at 150,001 – 300,000 baht will receive 750 baht maximum tax return while the earners who obtain 4,000,001 – more and are required to pay 35% of their yearly income for tax deserve 5,250 baht maximum deduction. In other words, the rate of tax rebate will vary accordingly to personal income tax rate of each individual.
Finance Minister Apisak Tantivorawong believed that the campaign will stimulate shoppers who are reluctant to spender their money in hands to help boost up the economy. Expected to spur domestic consumption, the tax incentive is estimated to increase Gross Domestic Product 0.1-0.2 percentage higher while the national tax revenue will expand up to 4-5 billion baht.
The incentive will be applied nationwide. Goods and services under the criteria include electrical appliances, high-tech gadgets, automobile parts, participating restaurants and beauty treatments. However, spenders should be aware that several purchases such as on alcoholic beverages, tobacco, gas, insurance, surgery, medical treatment or any overseas-travel package are excluded from this tax rebate. According to the campaign’s criteria, the tax-deduction will eligible only for the stores registered in the vat system and could issue official receipt indicating customers’ name and address.
Due to this fact, economists and experts explained that the new Finance Ministry’s initiative will promote income benefit only for big shopping centres and chain department stores who could issue proper receipt to customers. The small local shops, therefore, will be left behind from this incentive and even lose advantages to compete with the giant sellers. It is still debatable whether the measure is really benefit for the nation or it is just another product of populism.
In term of the government’s aspect, the policy is expected to persuade citizens to register to tax system. Currently, the number of population in the tax-revenue system remains very little in Thailand. As the privileges from this campaigns, major shopping malls are eagerly launching hot promotions. Siam Paragon offers a chance for customers who spend at least 2,000 baht to win BMW 320i M Sport. At the same time, Big C lately introduced attractive discounts for selected items. No matter how beneficial the incentive will be, physically, the new economic promotion is contributing more pleasant atmosphere during the New Year celebration.