Department panel to look into fairness of tax rules

The Revenue Department has set up a working panel to look at the adjustments of tax deductions and allowances for personal income tax to foster fairness for all taxpayers.

The panel will conduct a survey to find out which group of income earners benefit the most from the existing 20 tax deductions and allowances, Revenue Department director-general Prasong Poontaneat said.

A review of tax deductions for investment in long-term equity funds (LTFs) and retirement mutual funds (RMFs) is also essential, he said.

Taxpayers can deduct contributions of up to 15% of their taxable income or 500,000 baht, whichever is lower, for investment in LTFs.

They can also claim a tax deduction of up to 15% of their annual income for investments in RMFs, not exceeding 500,000 baht.

Money invested in LTFs must be held for at least five calendar years, while RMFs can be redeemed only once the investor reaches 55.

Some LTF investors, however, hold the units for slightly over three calendar years, buying units at year-end and redeeming them early in the fifth year, which is not considered long-term investment in the Finance Ministry’s view.

The tax privilege for LTFs is due to end next year.

LTFs are an efficient means of saving but need tweaking to count as a true long-term investment, Mr Prasong said.

He said for the expenditure allowance of 40% of annual personal income but not exceeding 60,000 baht, the Revenue Department would consider whether the rate was still appropriate within the current economic circumstances.

The department i ntends f or lowincome earners to gain the most benefit from the adjustments in tax deductions and allowances.

The impact on tax revenue will also be taken into consideration.

Recently, the Finance Ministry approved a downward revision of the Revenue Department’s tax collection target for this fiscal year of 160 billion baht, citing lower oil prices, shrinking revenue at large companies and declining import duties. The new target is 1.81 trillion baht.

The department fell short of its target by 16 billion baht for the four months through January, collecting 475 billion baht.

In another development, the Customs Department expects construction and renovation of seven border checkpoints to be concluded in three years.

The seven crossing points are Tak’s Mae Sot district, Mukdahan’s Muang district, Sa Kaeo’s Aranyaprathet district, Trat’s Khlong Yai district, Sadao and Padang Besar in Songkhla and Nong Khai’s Muang district.

The government has set aside 1 billion baht for design and adviser fees, Customs Department director-general Somchai Sujjapongse said.

The department is preparing to ease regulations governing the establishment of customs bonded warehouses in special economic zones to allow more local investors and small businesses to run bonded warehouses.