Finance Ministry’s proposal for lower tax ceiling and other incentives for targeted industries gets the green light
The Cabinet on Tuesday approved the Finance Ministry’s proposal to lower the income tax ceiling to 17% from 35% in a bid to encourage Thais working overseas to return home.

Deputy Finance Minister Paopoom Rojanasakul said the Cabinet had approved a draft royal decree to be enacted under the provisions of the Revenue Code to reduce the income tax ceiling for employees of targeted industries to 17%.

Income tax in Thailand is charged based on annual income and is set at seven levels, starting at 5%. The rate rises by 5% at every level and stops at 35%.

Paopoom said the new tax measure will apply to this tax year when returns will have to be filed early next year, once the draft decree is published in the Royal Gazette.

He said the draft decree is divided into two parts – one for employees and the other for employers. He said this will apply to companies of targeted industries that are already enjoying tax privileges under provisions of the Board of Investment Act and the Eastern Economic Corridor Act.

The draft decree will also allow such companies to deduct their revenue before tax at 1.5 times instead of just one time where the salaries of Thai experts are concerned.

According to Chula Sukmanop, secretary general of the Eastern Economic Corridor Office, companies that stand to benefit from this tax incentive are those that use the EEC as their manufacturing base. These include manufacturers of electric vehicles and future automobiles, medicine and healthcare, digital devices and electronics, BCG (bio-circular-green) industries and future service industries.

Asia News Network (ANN)/The Nation (Thailand)