Minister of Finance Arkhom Termpittayapaisith
The government plans to use tax incentives to support the growth of startups, said Finance Minister Arkhom Termpittayapaisith.
He said the measure could be either an income tax cut or an income tax exemption for Thai and foreign venture capital funds that invest in startups. The Ministry of Finance is working on the details of the plan.
The government introduced new tax incentives and measures this year to promote local businesses and ensure fair treatment in the tax system, as well as to increase the country’s revenue.
A new tax introduced this year is the Electronic Services Tax, which came into effect from September.
This law states that foreign electronic service providers and electronic platforms that earn revenues of more than 1.8 million baht per year by providing electronic services to customers not registered for VAT (value added tax ) in the country are required to register for VAT, file VAT returns. and pay the VAT by calculating the exit tax.
More than 100 online platform operators have already registered to pay VAT in Thailand.
Thailand’s enforcement of the Electronic Services Tax Law follows in the footsteps of more than 60 countries around the world that collect VAT from foreign electronic service operators with revenue in their territory.
A source from the ministry who requested anonymity said Thailand was undertaking a reform of the tax system to increase its revenue.
The government spent more recently to mitigate the impact of the protracted pandemic and kept the VAT rate at 7% for another two years, instead of the cap rate of 10%.
The administration also introduced two emergency loan decrees to allow it to borrow 1.5 trillion baht to fight the pandemic lull and inflate the declining economy.
In related news, the government missed its revenue-raising target. In fiscal 2021, which ended in September, it collected net income of 2.370 billion baht, below the target of 307 billion baht. This figure is 0.7% lower than the amount for the same period last year.