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Thai Government to Expand Tax Base and Build Economy

Given the ongoing pandemic and distressed Thai economy, Thailand has chosen to expand its tax base and accumulate greater revenues. Thailand has selected several methods to expand its tax base. Thailand has implemented 2 emergency loan decrees, allowing it to borrow 1.5 trillion baht. Thailand raised the public debt-to-GDP ceiling from 60% to 70% (reminiscent of other countries such as the US attempting to raise the debt ceiling and flood their markets with cash). Thailand has chosen to tax profits from cryptocurrency trades, perhaps an innovative and radical step to expand its tax base. Recent news reports also indicate that Thailand is considering imposing taxes on various products and ending tax waivers.

While the Thai economy has done well pre-pandemic, and GDP has expanded in recent years, revenue from tax has comparably not increased, primarily due to the range of tax exemptions Thailand has extended to diverse businesses. The financial transaction tax has existed in Thailand for at least 30 years, but has historically been waived, offering incentives to businesses, yet failing to contribute to the tax base. The Revenue Department anticipates a revenue of 20 billion baht just from an enlivened transaction tax.

The Bank of Thailand does not forecast a bull market or bright 2022 GDP growth but the picture is not completely bleak: there should be about 3.4% growth, at least when factoring in the effects of Omicron. The economy may return to pre-pandemic levels beginning in 2023, with increased GDP growth figures by the first quarter. Thailand intends to massively borrow to bolster the economy and ameliorate the budget deficit.

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