Tax refund delays: Stricter checks put paperwork in slow lane

Stricter document verification has led to delays in personal income tax refunds this year, the Revenue Department reported. An increase in the submission of fraudulent documents, particularly fake income certificates (50 Tawi), prompted the department to scrutinise tax refund documents more meticulously.

Vinit Visessuvanapoom, Deputy Director-General and principal advisor on tax base management stated that the department’s heightened caution stems from the rise in fraudulent submissions. Despite the current challenges, Vinit anticipates an improvement next year as companies have been asked to submit income certificates online. Although this is not mandatory, companies that do not comply will need to provide reasons to the department.

Some 11.9 million personal income tax forms were filed for the income year 2023, submitted between January 1 and April 29, 2024, marking a 3.34% increase from the same period last year. Of these, 4.25 million were requests for tax refunds, showing a 7.65% increase from the previous year.

Refunds have been processed for 3.39 million filings, a 6.77% increase from the previous year, with a total of 33.2 billion baht issued, reflecting a 7.57% year-on-year rise.

In fiscal 2023, ending on September 30, 2023, the Revenue Department collected 2.21 trillion baht in taxes, surpassing the target by 9% and exceeding the previous year’s figure by 2.1%.

Corporate income tax revenue amounted to 767 billion baht, 13.8% above the target and 5.3% higher than the previous year. Value-added tax revenue totalled 913 billion baht, 5.1% above the target, though 1.8% lower than the previous year.

Personal income tax revenue reached 395 billion baht, 10.9% above the target and 7.5% higher than the previous year while petroleum income tax revenue was 48.7 billion baht, 25.1% above the target, despite being 22.4% lower than the previous year.

Meanwhile, the Revenue Department anticipates the implementation of draft legislation aimed at taxing multinational enterprises (MNEs) to curb profit shifting to low-tax jurisdictions by 2025. This move is expected to enhance tax revenue by 12 billion baht annually.

Director-General Kulaya Tantitemit revealed that the draft legislation incorporates the Top-up Tax Act, which aligns with the Organisation for Economic Co-operation and Development’s (OECD) Pillar 2 principles, along with subordinate laws.