The Thai government is considering cutting the rate of personal income tax for highly-skilled foreign workers, in order to attract more talent to the kingdom. Ekniti Nitithanprapas from the Revenue Department says officials are mulling the possibility of reducing the rate to 17%.
The Bangkok Post reports that the rate of personal income tax in Thailand is based on salary and set at 5% for those earning between 150,001 baht and 300,000 baht a year. Workers with a yearly salary of more than 5 million baht are currently subject to 35% income tax, which is the highest rate.
It’s understood that highly-skilled foreign workers would need to be employed in areas in which Thailand has a shortage in order to qualify for the tax cut, but would be permitted to work anywhere in the kingdom. However, Ekniti says tax cuts alone will not attract foreign experts to Thailand, adding that factors such as safety and the quality of schools and medical care are very important. He says that because of this, some countries believe cutting the rate of tax makes no difference.
In related news, the Thai Cabinet has approved a reduction in import taxes on wines and other alcoholic beverages, and on cigars. Import duties on these items are being cut by 50% for 5 years, in a bid to attract more highly-skilled professionals. The Bangkok Post reports that the current rate of tax on these items is between 30% and 60%.
Meanwhile, Patchara Anuntasilpa from the Customs Department acknowledges that tax cuts may not attract foreign experts to the country, given that their high salaries mean such taxes are not an issue. However, he says his department is willing to give it a try if the Finance Ministry believes it will work.
SOURCE: Bangkok Post
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