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--DRAFT – Version as of 27/5/2005
(Not to be cited or quoted in this form)
Tax Policy and Reform in Asian Countries: Thailand’s Perspective
A Publication for the Journal of Asian Economics
By
Dr. Somchai Sujjapongse
Deputy Director-General
Fiscal Policy Office
Ministry of Finance, Thailand
31 May 2005
2
ABSTRACT
This paper gives overviews of Thailand’s tax system covering major taxes
administered by the central government and the local taxes administered by the local
government. Recent tax reform experiences are discussed at length starting from the
introduction of value-added tax (VAT) replacing the business tax to customs tariff
reform. Current issues on taxation are also highlighted ranging from tax base, direct
and indirect taxation, decentralization impediments. At present, tax revenue represents
a major source of income with about 90 percent of total government revenue and non-
tax revenue accounts for the remaining 10 percent. Furthermore, the Government relies
heavily on indirect taxes (~58 percent) as the main sources of revenue with direct taxes
and non-tax revenue account for the remaining 30 percent and 12 percent, respectively.
The Government has been undertaking comprehensive tax reform including
income taxes, excise taxes, customs duties in the efforts to broaden the tax base, to
enhance the fairness and equity of the tax system, and to utilize tax policies in
addressing the social issues through incentives and disincentives. Furthermore, the
government is also implementing modern and cutting-edge technology in tax
administration thereby providing effective and efficient e-government services to the
Thai people. This paper discusses the Roadmap for Tax Reform that would outline the
framework for future direction of taxation in Thailand. Finally, the paper gives
important insights on the, and draws important conclusions for the future of tax reform
in Thailand.
3
TABLE OF CONTENTS
I. Introduction
II. Overview of Thailand’s Tax System
- Personal Income Tax
- Corporate Income Tax
- Petroleum Income Tax
- Value added tax
- Specific business tax
- Excise tax
- Customs duties
- Local administrations’ revenue
III. Composition of Tax Revenue and Experiences on Tax Reform
- Composition of central government revenue
- Composition of local government revenue
- Major recent tax reforms in Thailand
IV. Issues of Taxation and Administration
- Low tax base
- Direct vs. Indirect taxes
- Decentralization
- “Socially-responsible” tax
V. Future Direction for Tax Reform
- Corporate income tax
4
- Personal income tax
- Value added tax
- Excise tax
- Customs duties
VI. Conclusion
5
INTRODUCTION
At present, Thailand is at the crossroads in terms of its economic and social
development. Fully recovered from the 1997 financial crisis, Thailand is now facing
new set of challenges and opportunities both on domestic and external fronts.
Domestically, exceptional political stability and sustained growth despite the negative
impacts ranging from severe drought to unrest in the 3 Southern provinces to
uncontrollable factors such as high energy prices and the spread of avian flu have
affirmed the resiliency and robustness of the Thai economy. In the past three years,
consumption-led growth has spurred new investments as Thailand’s capacity utilization
is reaching its potential (75.5 percent- a level reached in pre-crisis period). However,
the global economy has drastically changed in the past decade with the emergences of
China and India, the wide-spreading free trade arrangements, and the commercial
application of information technology. All countries alike are under pressure in the
increasing competitive global economy. The Thai government recognizes that the
country needs to focus on increasing its competitiveness and productivity on the macro-
level. The Government has recently begun the implementation of the five-year (2005-
2009) Strategies for Economic and Social Restructuring Plan. The objective is to
realize sustained and quality economic growth and better standard of living for all Thai
people.
Under the Plan, fiscal sector will be one of the focal issues for reform. The Ministry of
Finance (MOF) will undertake a comprehensive review of Thailand’s tax structure and
administration. The next few years will certainly be invigorating for MOF officials as
the government is shifting its gears to foster competitive and efficient Thai economy.
Section II begins by giving overview of the current Thailand’s tax system. Section III
6
discusses tax revenue compositions and the experiences on tax reform in Thailand.
Section IV highlights key issues of taxation and administration in Thailand. Section V
discusses the future direction of tax reform in Thailand. Section VI concludes.
7
SECTION II: OVERVIEW OF THAILAND’S TAX SYSTEM
The Thai Government derives revenue predominantly from taxes the most
important of which are: income tax, value added tax, excise tax, and import duties.
Personal income tax is a tax on an individual’s income whilst residing in
Thailand and is imposed at progressive rates of between 5 and 37 percent on net income.
An individual’s net income is determined by the deduction of expenses and personal
allowances from assessable income as specified by the Revenue Code. In addition,
income derived from financial assets is subject to a final withholding tax at source, at
the rate of 15 percent.
The other type of income tax is the corporate income tax. In general, companies
and registered partnerships are taxed at the rate of 30 percent on their net profits.
Reduced rates are permissible for Small and medium-sized Enterprises (SMEs) and
certain other qualified organizations.
Thailand has two types of sales taxes. The value added tax (VAT) is imposed on
a wide variety of goods and services supplied in Thailand and on imports at a single rate
of 7 percent. Exported goods and services are also taxable but some at a zero percent
rate, dependant upon the destination. The other type of sales tax is the excise tax that is
selectively imposed on a number of commodities. Excisable items are also liable for
VAT.
Import duties are collected from the cargo, insurance, and freight (CIF) price of
imported goods. The tariff structure is classified according to the Harmonized System1
and the rates range generally between 0 – 10 percent with the exception of automobiles
which attract a rate of 80 percent.
1 Harmonized System, the global classification system that is used to describe most world trade in goods
8
Personal Income tax
The Personal Income Tax is a direct tax levied on income earned from sources
within or outside Thailand during the taxable year. An individual residing in Thailand
for one or more periods aggregating 180 days or more in any tax year (calendar year) is
deemed to be a resident of Thailand. Income derived abroad by a resident of Thailand is
subject to tax only when the income is brought into Thailand. A non-resident however,
is subject to tax only on income derived from sources within Thailand.
Entities liable for income tax are (1) individuals, (2) nonjuristic partnership or
body of persons, (3) a taxpayer who dies during the tax year, and (4) Undivided estates
The tax base for personal income tax is the income from sources within or outside
Thailand on the amount that is brought into the country. Assessable income is classified
into major categories such as income from personal service rendered to employers,
income from copyright, franchise or any other right, annuity, income in the nature of
interest, dividends, gains from transfer of shares, and others.
Under the Revenue Code, there are expenses and allowances that can be
deducted from assessable income. The major deduction categories are standard expense
40 percent but not exceeding 60,000 Baht. However, actual expenses are allowed for
the certain types of income if the taxpayer can furnish adequate proof of the actual
expenses exceeding the standard deduction allowed. However, if the expenses
deductible on the basis of the evidence are less than the standard deduction expense,
they can be deducted only to the extent proved by evidence.
After deducting expenses, the allowances are also permitted for deduction such
as personal allowance of 30,000 Baht, spouse allowance of 30,000 Baht, Parent (and
parent in law) allowance of 30,000 Baht, Child allowance of 15,000 Baht, Child’s
education allowance of 2,000 Baht, and other types of allowances specified under the
9
Revenue Code. Furthermore, the Thai Government has been promoting private savings
by granting allowances for Provident fund or Pension Fund and Retirement Mutual
Fund amount 300,000 Baht or not exceeding 15% of net income.
With assessable income including the deductions and allowances, the net income
could be calculated and is subject to the following progressive rate/schedule:
Taxable Income (baht) Tax Rate (percentage)
0 - 100,000 exempted
100,001 - 500,000 10
500,001 - 1,000,000 20
1,000,001 - 4,000,000 30
Over 4,000,000 37
For a taxpayer with assessable income over 60,000 baht from sources not
by virtue of employment, tax liability must not be less than 0.5 percent of his assessable
income.
With respect to the Personal Income Tax, the Royal Thai Government
has signed the double taxation agreements with 45 countries, namely, Norway,
Denmark, Germany, France, Singapore, the Netherlands, Korea, Italy, Belgium,
Pakistan, the United Kingdom, Indonesia, Malaysia, Mauritius, the Philippines, Poland,
Canada, Finland, India, Austria, China, Sweden, Hungary, Australia, Sri Lanka, Japan,
Vietnam, the Czech Republic, Switzerland, Israel, South Africa, Romania, Laos, the
10
United States of America, Bangladesh, Nepal, Spain, New Zealand, the United Arab
Emirates, Uzbekistan, Armenia, Bulgaria, Cyprus, Luxembourg and Bahrain.
Corporate Income Tax
The Corporate Income Tax is a direct tax levied on net profit of a juristic
company or partnership at the end of an accounting period. The term “juristic company
or partnership” means a limited company, limited partnership or registered partnership
organized under Thai or foreign law and includes any joint venture, any trading or
profit-seeking activity carried on by a foreign government or its agency or by any other
juristic body organized under a foreign law and any foundation or association engaged
in any revenue producing business. Exemptions, however, are granted to foundations or
associations designated to be a public charitable institution or organization by the
Ministry of Finance.
The corporate income tax base is the net profit, commonly also known as net
income, net earnings, and bottom line is ascertained by subtracting all allowed
deductible expenses from total sales in an accounting period. The allowed deductible
expenses are subjected to conditions commonly found in corporate income tax laws of
most countries.
A juristic company or partnership incorporated under a foreign law and not
carrying on business in Thailand which receives the aforesaid assessable income paid
either from or within Thailand pays tax on the amount received through tax withholding
by payers of income.
Any juristic company or partnership failing to file a return or to keep accounts,
which makes its net profit undeterminable, is subject to Corporate Income Tax at the
rate of 5 percent on the aggregate.
11
In computing net profit, corporations are allowed to include deductible expenses
incurred from business operations except those that are disallowed by the Revenue
Code. A payment for charity as well as a payment for education or sport, as recognized
by the Department of Revenue, is deductible but on the condition that the amount
deducted for each case shall not exceed 2 percent of the net profit.
For allowances, a company organized under the Thai law is entitled to include as
revenue only one-half of the dividends received from a company organized under the
Thai law, mutual fund or a financial institution organized by a specific law of Thailand
for the purpose of lending money to promote agriculture, commerce of industry, or of a
share of profits received from a joint venture.
However, listed companies in the Stock Exchange of Thailand organized under
the Thai law are not required to include as revenue, any of the dividends received from
a company organized under the Thai law, mutual fund or a financial institution
organized by a specific law of Thailand, or a share of profits received from a joint
venture.
There are also withholding taxes such as government agencies are required to
withhold 1 percent of the amount of assessable income paid to any juristic companies or
partnerships, and companies or partnerships that dispose of profits or sums regarded as
profits out of Thailand are required to withhold tax at 10 percent, and withholding tax at
the rate of 1 percent applies to income from the sale of immovable properties, etc.
Generally, Corporate Income Tax rate in Thailand is 30 percent on net profit.
However, reduced rates are applied depending on the type of taxpayers (details are
shown in Table 1). However, profit disposed out of Thailand and Income paid to non-
resident companies or partnerships are subject to withholding tax rate of 10 percent.
Interest paid to a juristic company or partnership organized under a foreign law
and not carrying on business in Thailand is subject to a withholding tax rate of 15
12
percent. If such company or partnership is a financial institution in a country that has a
double tax treaty with Thailand, the withholding tax rate is reduced to 10 percent.
In addition, there are some exemptions from the corporate income tax under
specified conditions such as if the income is (1) paid to a foreign financial institution
owned by its government and organized by a specific law.
(2) paid by the Thai Government, The Bank of Thailand, a public enterprise, or a
financial institution organized by a specific law of Thailand for the purpose of lending
money to promote agriculture, commerce, or industry.
Table 1 Corporate Income Tax Rates
Taxpayer Tax Base Rate
1. Small company which refers to a
company with paid up capital less
than 5 million Baht at the end of each
accounting period.
- Net profit not exceeding 1 million
Baht.
- Net profit over 1 million baht up
to 3 million Baht.
- Net profit exceeding 3 million
Baht.
15%
25%
30%
2. Companies listed in Stock Exchange
of Thailand (SET)
- Net profit for first 300 million
Baht.
- Net profit for the amount
exceeding 300 million Baht.
Remark : both for first 5
accounting periods after listing
25%
30%
13
Taxpayer Tax Base Rate
3. Companies newly listed in Stock
Exchange of Thailand. (SET)
- Net profit 25%
4. Company newly listed in Market for
Alternative Investment (MAI)
- Net profit for first 5 accounting
periods after listing.
- Net profit after first 5 accounting
periods.
20%
30%
5. Bank deriving profits from
International Banking Facilities (IBF)
Net profit 10%
6. Foreign company engaging in
international transportation
Gross receipts 3%
7. Foreign company not carrying on
business in Thailand receiving
dividends from Thailand.
Gross receipts 10%
8. Foreign company not carrying on
business in Thailand receiving other
types of income apart from dividend
from Thailand.
Gross receipts 15%
9. Foreign company disposing
profit out of Thailand
Amount disposed 10%
14
Taxpayer Tax Base Rate
10. Profitable association and
foundation
Gross receipts 2% or
10%
11. Regional Operational
Headquarters (ROH)
- Income from servicing
subsidiaries of ROH
- Interest received from
subsidiaries of ROH
10%
- Royalty fee R&D (Research and
Development) received from
subsidiaries, branch or other
company
Petroleum Income Tax
In Thailand, companies producing or exploring crude oil are singled out for
special treatment with respect to income taxation. The corporate tax rate for petroleum
companies is 50 percent instead of the normal 30 percent rate for ordinary corporations.
The tax under which these companies pay their income taxes is called the Petroleum
Income Tax. Under the petroleum Income Tax Act B.E. 2532 (1989) companies liable
to such tax are (1) any company with a drilling concession or with shared interest and
(2) any company that exports all crude oil purchased from a company with a drilling
concession.
The tax base covers all income obtained in conjunction with crude oil
transactions including income from sale of petroleum, value of crude oil shipped to oil
15
refinery, Value of crude oil paid to the government as royalty, income obtained through
transfer of assets and rights to petroleum concessions and businesses, and all other
incomes obtained in connection with petroleum transactions.
Value Added Tax (VAT)
The value-added tax (VAT) was introduced on January 1, 1992 to replace the
‘business tax’. The VAT is of a consumption tax-type with full tax credit. Effectively,
VAT is therefore a tax on total consumption expenditures, the burden of which is
eventually borne by consumers - not by entrepreneurs.
Any person conducting a taxable activity is required to register for VAT
purposes and as a result, they will be liable for VAT payments. The tax will be charged
at each stage of the production and distribution chain. VAT effectively covers the
following:
1) Manufacturers, importers, exporters, wholesalers, retailers, and any
other vendor who sells goods in the course of their business.
2) Any person who renders services in the course of their business or
profession.
3) Any person deemed to be a VAT taxpayer by the Act.
In general, an organization that makes taxable supplies is required to collect a 7
percent tax (called “output tax”) – inclusive of surcharge tax for local government – on
the value of its supplies and secure an input tax credit for its taxable inputs. Many large
businesses fall into this category.
Organizations with annual taxable turnover less than 1,200,000 baht are exempt
from VAT. However, they cannot use input tax as a credit against the output tax. The
trading of certain kinds of goods and services are liable to a zero-percent-rate VAT. In
16
such cases, the supplier is not required to collect tax on its supplies, but can secure a full
recovery of its input tax. Zero-percent-rate VAT will be applicable to the following
items such as Exported goods, Services rendered in the Kingdom but used abroad, Sale
of goods and services to a government ministry or department, a local government or
state-owned enterprise under a loan or grant project, financed by unilateral and bilateral
sources, Sale of goods and services to the United Nations and its specialized agencies as
well as embassies, consulates, and Sale of goods and services between bonded
warehouses or between enterprises located in export processing zones.
The VAT is charged on the amount of the sale invoice at a single rate of 7
percent inclusive of municipal tax. The net tax liability of each taxpayer is calculated
monthly by crediting the amount of VAT paid on the purchase of inventories, capital
goods, and raw materials for sale or utilization in the production process during the
month (i.e. the Input Tax) against the total value of VAT due from the sale of goods or
services during the same month (i.e. the Output Tax).
Hence,
VAT payable = Output Tax – Input Tax
Specific Business Tax
At the time of the introduction of VAT into Thailand, it was apparent that in
certain businesses there were difficulties in defining their added value, such as the
financial and real estate businesses. In order to avoid the complexities of defining the
added value, certain businesses were excluded from the VAT system, but continue to be
subject to tax on the basic of gross receipts instead of VAT in the same manner as under
the former Business Tax system.
17
At present, the Specific Business Tax is imposed on various business
transactions, such as banking, or similar business, finance, credit foncier and securities
business, insurance, pawn brokerage, dealing in immovable property and sale of
securities in the Stock Exchange of Thailand (SET).
The Specific Tax rates range between 2.5 – 3.0 percent, as shown in Table 3.
These rates are exclusive of surcharge tax for local government. The surcharge tax for
local government amounted to 10 percent of the Specific Business Tax must also be
added. The filing of the return and payment of the tax shall not be later than the 15th
day of the month on gross receipts of the preceding month.
Table 3 Tax Bases and Rates of Specific Business Tax
Business
Tax Base
Tax Rate
(as percentage
of gross receipts)
Banking or similar business,
finance, credit foncier and
securities business
Interest, discounts, fees, service
charge or profit before any
deduction of expenses from the
purchase or sales of negotiable
instruments or instruments
evidencing debts and gross
profits before any deduction of
expenses from exchange or sale
of currencies, issuance of
3.0
18
Business
Tax Base
Tax Rate
(as percentage
of gross receipts)
negotiable instruments of
outward remittance of money.
Life Insurance Interest, fees or service charge 2.5
Pawn Brokerage Interest, fee, and money,
property, remuneration or any
benefit of value received or
receivable from the sale of
overdue pawn property
2.5
Dealing in immovable property Receipts before any deduction
of expenses.
3.0
Sale of securities in SET. Receipts before any deduction
of expenses.
3.0
(currently is exempted)
Factoring Interest, discounts, service fees
and other fees.
3.0
Excise Tax
The excise tax is an indirect-selective sales tax. Apart from the dominant role of
a revenue generator the purpose of imposing excise taxes are to restrict consumption of
19
certain goods, to promote social and economic equity, encourage saving, and to reflect
energy conservation and environmental issues.
Excise tax is levied at either a specific or an ad-valorem rate whichever yields
the higher proceeds. Applicable excise tax rates are specified in the Excise Tariff Acts
and under the Ministerial Regulation. All goods subject to excise tax remain subject to
VAT.
At present, excise taxes are imposed on 20 commodities and services, namely:
spirits tobacco playing cards
telephone services non-alcoholic beverages Luxury lamp and
chandeliers
lead crystal products automobiles Yachts
perfumes wool carpets Motorcycles
marble batteries horse racing
golf courses night club and discotheques Government lotteries
Turkish baths, saunas and
massages parlours
petroleum and petroleum
products
Customs Duties
Customs duties, imposed under the Customs Tariff Decree B.E. 2530 (1987), are
levied on both imports and selected exports. Goods that are obscene, dangerous to
health, or harmful to the national economy may be prohibited from import. Moreover,
specific goods may be restricted from time to time, and these require prior government
20
permission before being either imported or exported. Apart from these, most goods may
be imported or exported after complying with the necessary customs procedures and the
payment of customs duties, where applicable.
Thailand has adopted classification of imports is based on the Harmonized
Commodity Description and Coding System (Harmonized System 2002). This system
covers approximately 5,505 items and is consistent with classifications used by most of
Thailand’s trading partners.
Duties are levied on either a specific or an ad-valorem basis, whichever is the
higher. The customs tariff rates are listed in Part 2 of the Customs Tariff Decree BE
2530 (1987). The value of imports is based on their CIF prices. Customs tariffs
previously ranged between 0% - 80%, the highest rate being for passenger cars.
Imported goods exempted from customs duties are listed in Part 4 of The
Customs Tariff Decree BE 2530 (1987). They are, among others, export articles
including those exported which are then re-imported within one year without any
change in character or form, and for which a re-importation certification was obtained at
the time of exportation, and articles imported into Thailand under which duty has been
paid and subsequently sent out of the country for repairs, if re-imported within one year
from the date of re-importation certificate issued at the time of exportation.
In recent years, the tariff rate has been broadly reduced to the targeting range of
3 rates in accordance with production processes, namely:
(a) 1 percent for raw materials and inputs not produced locally.
(b) 5 percent for semi-finished products.
(c) 10 percent for finished products, products requiring extra protection, and
luxury goods.
At present, the current implementation of tariff reform is as follows:
21
Timeframe Items Below the 3 rate
framework
At the 3 rate
framework
Above the 3 rate
framework
Present 5505 1457 2273 1688
Jan. 2008 5505 1447 2404 1567
It is expected that by January 2008, over 70 percent of tariff items would be
equal to or less than the 3 rate framework.
Local Administration’s revenue
Because local administrations have a responsibility to provide basic public
services, they need to raise revenue to support these activities. The primary sources of
local administration’s revenue are local levied taxes, surcharges on government tax,
shared revenue, revenue transfers, and government grants.
Local Levied Taxes
Local levied tax is the revenue directly administrated and collected by
the local administration directly. This source of local revenue can be classified into two
groups namely:
1. Local levied taxes imposed by the Municipality (Tessaban), Tambon
Administrative Organizations (TAOs), Bangkok Metropolitan Administration
(BMA) and Pattaya City
• Land and Building Tax
22
This tax is collected from an owner who lets buildings, other constructions, and
land or uses such for industrial or commercial purposes. The 12.5 percent tax
rate is levied on the annual value, which is calculated as the sum of the
reasonably expected price of the property to be let in one year.
• Land Development Tax
This tax is collected from owners of land or persons in possession of land
(vacant land not owned by another). Tax rates ranging between 0.25 – 0.50
percent of official land valuation are applied. However, there are exemptions for
land used for residence, farming, or cultivation purposes. Exemptions dependant
upon current local administration’s regulations.
• Signboard Tax
This tax is annually collected from owners of signs or billboards displaying
words, trademarks, and/or products in any form displayed on any material for
the purpose of advertising. Tax rate depends on the language used on the
signboard. The use of Thai language, is 3 baht per 500 sq.cm and foreign
language is 40 baht per 500 sq.cm of signboard. Furthermore, the minimum tax
liability is 200 baht in all cases.
• Slaughter Tax
Slaughter tax is levied on a butcher who slaughters cattle, goat, sheep, pig,
chicken, ducks, or geese. Tax rate is between 10-30 baht per animal.
• Fee, Fine and License
Garbage collection fee, construction permission fee, and others
2. Local levies collected by Provincial Administrative Organizations (PAOs)
23
• Hotel Tax
A PAO can impose a tax on hotel guests of up to 3 percent of the room fare.
• Petrol Stations Tax
A PAO can impose petrol station tax on retail fuel including gasoline, diesel oil,
and petroleum gas. Tax rate is up to 0.05 baht per litre of fuel.
• Retail Tobacco Tax
This tax is imposed on retail shops that sell tobacco. The tax rate is up to 0.05 baht
per cigarette.
Surcharge on Government Tax
This surcharge tax is an additional 10 percent on top of tax levied by the
government less 5 percent of this total surcharge tax for collection expenditure. The
surcharge tax is added on:
Value Added Tax added 11.11 %
Specific Business Tax added 10 %
Liquor Tax added 10 %
Excise Tax added 10%
Retail Liquor License and Gambling License added 10 %
Gambling Tax on Horse Racing added 2.5 %
24
Shared Revenue
This type of revenue is the revenue collected by the government and shared with the
local administration, which includes:
A five percent share of VAT collected in every province except Bangkok which is
then transferred to a PAO in that province;
60 percent of mineral and petroleum tax distributed by the source of revenue ; and
VAT additionally transferred to all local administrations according to the
Decentralization Act.
Revenue Transfer
This revenue is collected by government agencies and transferred to local
administrations and includes:
Motor Vehicle Tax and fees collected from provincially registered motor vehicles,
which are then transferred to the respective local administrations.
Real estate registration fee distributed by the source of revenue.
25
SECTION III: COMPOSITION OF TAX REVENUE AND EXPERIENCES ON
TAX REFORM IN THAILAND
Composition of central government revenue
Since the early 1990s, Thailand has been undertaking economic and financial
reforms in critical areas covering fiscal and financial sectors, state enterprises, and
overall public sector. As a part of overall fiscal sector reform, the Thai Government has
initiated tax reform starting in 1992 with the introduction of the value-added tax (VAT)
and other tax reform measures. The rationale of tax reform is twofold. Firstly, tax
reform was a part of structural adjustment to reduce any severe economic distortions, to
promote efficiency in the economy, and to enhance proper allocation of resources.
Secondly, the Government intended to increase revenue generation in a reasonably non-
distorting, equitable, and sustainable manner. Fortunately, the economy entered into a
rapid growth phase in the late 1980s and 1990s that enabled the Thai Government to
implement major changes in its tax policies.
Under the Thai bureaucratic system, the Ministry of Finance is empowered to
collect taxes through the three departments, namely: the Department of Revenue, the
Department of Excise, and the Department of Customs. Department of Revenue is
responsible for personal income tax, corporate income tax, petroleum tax, value added
tax, special business tax, etc. Department of Excise collects liquor tax, tobacco tax,
automobile tax, and other selected excise taxes. Finally, Department of Customs
administers import and export duties. Moreover, other departments in other ministries
are empowered to levy other related charges or fees. For instance, the Department of
Mineral Resources collects royalties for mineral exports and Department of Land
collects registration fees on transfer of land ownership. Other revenue sources are profit
remittances from the state enterprises, income of rental of government properties, etc.
26
All revenues must be forward to the central government budget. The government
revenue breakdown between Fiscal Year 1998-2004 is shown on Appendix 1.
In examining the structure and composition of Thailand’s government revenues
between Fiscal Year 1998-2003, tax revenues comprise approximately 88 percent of
total government revenue with non-tax revenue taking up the remaining 10 percent.
Indirect tax has the largest share (~58 percent) in the total revenue relative to the direct
tax (~30 percent) and non-tax revenue (~12 percent).
Figure 1 : Share of Total Government Revenues (In Total)
Fiscal Year 1998-2003
Direct Tax30%
Indirect Tax58%
Non-Tax Revenue12%
The trend in total government revenue collection has steadily increasing since
the trough in FY 1999 due to gradual recovery from the Asian financial crisis. Direct
tax increases the most during this period from 458 billion Baht in FY 1999 to 647
billion Baht in FY 2003 followed by indirect tax which increases from 226 billion Baht
to 348 billion Baht over the same period. However, non-tax revenue remained stagnant
over this period.
27
The composition of tax revenue shows that value added tax, excise tax,
corporate income and personal income taxes take up most of the tax revenue. Customs
duties have contributed less to the government revenue since Thailand has entered into
trade liberalization commitments under WTO, AFTA, and other FTAs. Other taxes are
minor and insignificant. These are some capital gain tax, and other small taxes.
Property tax, albeit being minimal, is collected by the local governments through Land
and Building tax and Local Development tax (See Appendix 1).
227,741.3
496,126.3
91,812.7
225,762.5
458,540.5
108,757.3
248,083.4
469,254.7
100,256.6
267,969.7
502,350.3
104,295.7
297,914.0
551,341.0
108,375.0
347,941.0
646,732.0
118,485.0
-
100,000.0
200,000.0
300,000.0
400,000.0
500,000.0
600,000.0
700,000.0
1998 1999 2000 2001 2002 2003
Figure 2: Share of Total Government RevenuesFiscal Year 1998-2003
Direct Tax Indirect Tax Non-Tax Revenue
Million Baht
Fiscal Year
28
Figure 3 : Composition of Tax Revenue (In Percent) Fiscal Year 1998-2003
Unit : Million of Baht (Percent)
Value Added Tax 1,331,693.2
( 27% )
Excise Taxes 1,122,671.5
( 24% )
Custom Duties 517,769.0
( 11% )
Corporate Income Tax 882,794.7
( 19% )
Personal Income Tax 647,634.3
( 14% )
Ohers 237,194.0 ( 5% )
Composition of local government revenue
When the present constitution was effected in 1997, it created a major change in
the decentralization process as it introduced the principle of local autonomy and
therefore required the government to draft the Decentralization Act and establish a
National Decentralization Committee (NDC). The NDC was responsible for drawing up
an action plan to determine how decentralization would proceed. Furthermore, the NDC
outlined the power, authority, and duties that would be granted to local administrations
and further, what responsibilities would be transferred to them from the government.
According to the Decentralization Act, aggregate local administration revenue must not
be less than 20 percent of the total government’s net revenue in FY 2001, increasing
and not to be less than 35 percent of the government’s net revenue by fiscal year 2006.
In reality, the local governments still heavily relies on the central government
for revenue. There are over 7,700 local governments in Thailand which are categorized
as follows:
29
(1) Bangkok Metropolitan Administration
(2) Provincial Administrative Organization
(3) Tambon Administrative Organization
(4) Municipality
(5) Pataya City
As of FY 2002, the total local revenue was 164 billion Baht, but the proportion
of the “local levied” revenue was merely 13 billion Baht or 8 percent. Major revenue
sources for the local governments came from the surcharge tax, shared tax, and grant
from the central government. Certainly, the effectiveness of decentralization policy
requires local government to have more autonomy from the central government, and not
to be overly-dependent on the central government for funding.
The detailed breakdown of the local governments’ revenue between FY 1998 to FY
2002 is as shown in Appendix 2.
30
Major recent tax reforms in Thailand
In 1961, the Thai Government had introduced the 1st Economic and Social
Development Plan which placed strong emphasis on industrial development and
pursued import substitution strategy. Over the next three decades, tax system was
adjusted and fine-tuned according to the new arising developments and to enhance
efficiency and effectiveness of tax administration. However, there was no major change
in the tax framework during this period. However, new developments and global trend
in the early 1990s created the impetus for the Government to thoroughly review its
long-standing tax system. Increasing international trade, investment and factor mobility
all have created a paradigm shift towards economic policies with outward orientation,
and protectionism has been gradually on the declining trend. More economic groupings
have been established such as APEC and AFTA that spurred trade liberalization in the
Asian region.
In Thailand, the economy has grown from low-income level (2,456 Baht per
capita) in 1961 to medium income level (49,480 Baht) in 1992. The once agricultural-
based economy was transformed into industrial-based economy. For these reasons, past
Governments have decided to undertake economic reform and set new policies that lead
to further integration of Thailand into the world economy. Tax reform policies have
been used to achieve this end and to enhance competitiveness vis-à-vis the rest of the
world.
Major tax reforms during 1990s up to the present time (May 2005) are as follows:
1. Introduction of value added tax
It is generally considered that one of the most important tax changes in recent
Thai history is the introduction of value added tax (VAT) in 1992 to replace the
business tax. After the introduction of VAT, products that were liable for higher tax
31
amount under the business tax such as automobiles, electrical appliances, perfume and
cosmetics, etc. are taxed at the normal VAT rate and higher excise tax so that the tax
burden remains the same.
2. Comprehensive reform of the tax structure
In the past, tax rates was set at relative high levels such as personal income tax
up to 55 percent, business tax up to 50 percent, etc. Corporate income tax was set at 30
percent for all types of businesses. Since then, the tax rates have been lower to create
greater incentive for economic activities and in line with the global trend for lower tax
rates. In addition, Government has used tax as policy instruments to support certain
sectors such as SMEs and listed companies.
3. Reform of the Customs tariff structure
For the customs duties, the tariff rate has been broadly reduced and the range has
narrowed to that of targeting 3 rates for production processes, namely:
(a) 1 percent for raw materials and inputs not produced locally.
(b) 5 percent for semi-finished products.
(c) 10 percent for finished products, products requiring extra protection, and
luxury goods.
As a result of the customs tariff reform in 2002, the number of tariffs decreased
to 3 rates as shown above. However, the reform package has yet to be completed in its
entirety. Major remaining items are petrochemical products; their tariffs will be reduced
in line with the 3-rate framework. The average tariff rate (general international trade) as
of January 1, 2004 is 11.46 percent. The average tariff rate (applied to WTO member)
is 10.71 percent
32
10.7111.9711.97
13.7611.46
12.7412.7415.93
0
6
12
18
2002 2003 2004 2005Average tariff rate (Applied)Average tariff rate (General)
Figure 5: Average Tariff Average Rate (Applied and General) 2002-2005
33
SECTION IV: ISSUES FOR TAXATION AND ADMINISTRATION
Low tax base
Thailand has most of the taxes similar to international standard and the tax
legislations have broadly defined tax base such as income tax covers all income
generated in the country. In reality, tax collection is relatively low as compared to the
size of the economy (only 17.9 percent of GDP versus 25-30 percent of GDP for the
OECD countries). While it is estimated that over 10 million people are eligible for
personal income tax in Thailand, personal income tax filings are only 6 million.
The primary reasons for Thailand’s low tax base are numerous tax exemptions
under Revenue Code, ministerial decrees, and other related law. In addition, tax
expenditure measures such as investment promotion tax incentives through the Board of
Investment (BOI) also give sizable tax breaks to the private companies. Another main
reason is existing prevalent tax evasion in Thailand and a large “informal” sector that is
not covered under the tax system. The low tax base leads to high tax rates for the
general population; this situation creates unfair sharing of tax burden.
In comparison with other countries, Thailand is on par with most countries in
Asia in terms of tax revenue to GDP.
Tax Revenue/GDP 1999 2000 2001 2002 2003 2004
Thailand 15.4 15.5 15.1 15.9 16.7 17.5
Singapore n.a. 15.3 15.1 13.2 n.a. n.a.
Indonesia 15.5 n.a. 13.1 n.a. n.a. n.a.
Philippines n.a. 13.7 13.5 12.5 n.a. n.a.
34
China P.R. 6.7 7.6 8.3 n.a. n.a. n.a.
India n.a. 9.0 8.6 9.5 n.a. n.a.
Sources: Thailand MOF and IMF Yearly Government Finance Statistics (2003)
However, when comparing to developed countries and transitional economy (OECD
countries), Asia as a whole region and Thailand in particular still record relatively low
tax revenue to GDP. The United States, the United Kingdom, and Japan collect tax
revenue to GDP in 2000 at 29.5, 38.1, and 27.1 percent, respectively.
Tax Revenue/GDP 1990 to 1995 1996 to 2001
Developed Countries 37.8 40.1
Transitional Economies 34.7 31.4
Developing Countries 18.7 19.2
Note: Average taken by median value of simple averages
Source: UNPAN Statistical Database
However, one should examine these numbers with caution as different countries may
decide to pursue different set of tax policies (low tax and high tax rebate). While the
“optimal” level of tax revenue to GDP is unclear with no consensus, exceedingly low
level of tax outturn to the size of the economy may suggest the ineffectiveness and
inefficiency of tax administration.
35
Direct vs. Indirect taxes
Direct taxes are defined as taxes that the taxpayers can not shift the tax burden to
others such as personal income tax, and corporate income tax. Indirect taxes are defined
as taxes that taxpayers can shift the tax burden to others such as VAT and sales taxes,
excise tax and customs duties.
Indirect taxes are the predominant sources of government revenue for Thailand.
For the period between FY 1998-2003, indirect tax averages about 58 percent of total
revenue with direct tax and non-tax revenue account for 30 and 12 percent, respectively.
Indirect taxation acts as regressive tax in which the tax burden falls on everyone equally
regardless of their income (or ability to pay).
Comparing with most countries in Asia, Thailand shares similar experience in
heavily relying on indirect taxes as sources of government revenue.
Indirect Tax Revenue/
Total Revenue
1999 2000 2001 2002
Thailand 59.1 58.1 59.1 58.0
Singapore 33.4 33.7 33.3 n.a.
Indonesia 33.0 n.a. 44.7 n.a.
Philippines 52.3 51.0 49.5 n.a.
China P.R. 89.3 n.a. n.a. n.a.
India 66.3 62.4 62.4 n.a.
Sources: Thailand MOF and IMF Yearly Government Finance Statistics (2003)
36
On the contrary, most developed countries/economies tend to rely more on
direct taxes relative to indirect tax. Asian region seems to rely on indirect tax
particularly for the developing countries. In the case of Japan, it shows the numbers for
developed countries with direct tax accounts for over 79.4 percent of government
revenue and indirect tax accounts for only 18.7 percent in 1993. Taking these statistics
into consideration, does it mean that developing countries in Asia in general and
Thailand in particular still have rooms for improvement in terms of direct tax structure
and administration? Could it be that the “missing” tax revenue as a percentage to GDP
is the revenue “foregone” from direct tax? To answer these questions would require in-
depth analysis into the direct tax administration and structure of the respective countries.
Government Revenue/GDP
(1990 to 2002)
Direct Tax Indirect tax
Developed Countries 63.3 28.6
Transitional Economies 51.0 45.1
Developing Countries 28.3 57.9
Asia & Oceania 34.1 60.4
Note: Average taken by median value of simple averages
Source: UNPAN Statistical Database
37
Decentralization
Decentralization has been a national agenda of the Thai government. Fiscal
decentralization has not been proceeding according to the Decentralization Procedure
and Plan Act which stipulates that the proportion of local government revenue must be
at least 35 percent of the central government revenue in 2006. At present, the ratio is at
23.5 percent for FY 2005. Local governments are still very much dependent on the tax
collection capacity (i.e. shared tax) and transfers from the central government.
Increasing the local government capacity for tax collection is crucial for the success of
decentralization.
The current policy issue for decentralization is to expand the tax capacity of the
local authorities. The new local tax law called Property Tax Act will be under
legislative consideration by the Thai Parliament soon. If implemented, this property tax
would enable the local authorities to collect tax in their localities more effectively and
efficiently. In the near future, they are expected to have more responsibilities and
administrative powers as education and health care functions are eventually transferred
to the local authorities.
“Socially-responsible” taxes
Human behaviors and actions often create externality – the benefit or cost of
the action not fully borne by the individual, but by the society as well. Taxation is the
economic instrument that can be used to “internalize” the externality cost.
In Thailand, environmental conservation is gaining more attention by the public.
To date, the Government has been using excise taxes to levy tax on environmentally-
38
damaging products. Other related ministries such as Ministry of Natural Resources and
Environment and Ministry of Industry are empowered to collect charges/fees on
environmental-damaging behaviors under their jurisdiction.
In addition, the government is also targeting tax instrument to promote “social-
responsible” behaviors by the individuals. The so-called “sin” taxes on products
harmful to public health such as alcohol and cigarettes are under reviewed. The greater
use of tax instruments and improved administration may be necessary toward curbing
the consumption of these products.
To promote Thai family value, the government has recently given tax incentive
for people to look after their parents. Tax allowance of 30,000 baht is given to tax-
payers who take care of their parents or parent-in-law in their old ages.
39
SECTION IV: FUTURE DIRECTION FOR TAX REFORM
The Thai Government has been carefully reviewing the overall tax structure.
Given the improved economic climate and hence increasing revenue outturns, the
Government now set its policies to achieve sustainable and broad-based development
and to transform Thailand into a more competitive economy with knowledge-based
human resources. However, the tax reform must be undertaken under the framework of
fiscal sustainability. In this regards, four fiscal targets have been set, namely: public
debt to GDP less than 50 percent, debt service to the budget less than 15 percent, fiscal
balance from FY 2005 onwards, and capital expenditures to the budget more than 25
percent. At present, the Government has successfully achieved these targets with
balanced budget in FY 2005, the first time since the 1997 financial crisis.
At present, the Government is formulating the Roadmap for Tax Reform with
views to broadening the tax base, increasing competitiveness, promoting social
development, and increasing private sector participation. The Roadmap will review the
tax structure for major tax categories such as corporate income tax, personal income tax,
value added tax, excise tax, and customs duties as follows:
Corporate income tax
Currently, corporate income tax rates in Thailand stand at relatively high rate at
30 percent of net profit for general corporations and 15-30 percent of net profit for small
and medium-sized businesses (SMEs). The government is reviewing whether the
corporate income tax rate could be lower to the comparative level with other countries
in the region. There would serve to lessen the tax burden on the entrepreneurs and to
promote greater incentives for investments. Furthermore, lowering tax rate could level
the playing fields for the domestic vis-à-vis foreign businesses, and induce more
corporations to enter into tax base (in other words, increasing relative cost from tax
40
evasion). Finally, the Government is also examining how the SME sector could be
specifically targeted for growth and development. Small business at their early stage
should be particularly targeted for promotion.
Personal income tax
At present, the personal income tax has 5 tax brackets with exemption for the
first 100,000 Baht of net income and the 37 percent being the highest bracket for
income in excess of 4 million Baht.
The Government is examining to streamline the personal income tax structure and
procedure to lessen the complexity and increase efficiency of tax administration.
Therefore, the tax structure could be less than 5 brackets with the highest rate lowered
to be consistent with the corporate income tax.
Value added tax
The value added tax was reduced from 10 percent to the current level of 7
percent since 1 April 1999 to stimulate the economy during the crisis. It was a
temporary measure that was due to expire in 2 years, but the government decided to
grant the extension to 30 September 2005. It is estimated that increasing VAT would
have a negative impact on the economy with 1 percent increase in VAT theoretically
leads to 0.95 percent reduction in GDP growth, but also results in 30 billion Baht in
additional government revenue. Policy decision is being made on whether or not the
VAT would be increased from the current level.
Excise tax
In principle, excise tax should only be levied on selected products that have
negative externality to the society, harmful to public health, or special services from the
government. At present, the Excise Department is responsible for excise tax collection
41
for 20 types of goods and services with multiple applicable rates and very complicated
tax calculation method (inclusive tax). The Government is examining to rationalize the
excise tax structure to enhance the confidence of the entrepreneurs and minimize the
cost of administration.
The excise tax will be categorized into the following 4 groups as follows:
1. Products and services that are harmful to public health
2. Products and services that are against morality
3. Products and services that are luxury
4. Products and services that are given concession by the government
Excise tax reform will consider products and services that can not be categorized
into the mentioned 4 groups, and should no longer be levied excise tax such as wool
carpets and lead crystal products. Spa services are also under consideration to be
granted excise tax annulment.
Furthermore, the Government is examining to introduce environmental tax, and
the excise tax on environmental-damaging products such as batteries and certain
petroleum products would have to be repealed to minimize redundancy.
Customs duties
The objectives for customs tariff reform are to increase competitiveness and to promote
investment both domestic and foreign. Since 1999, the Government has undertaken a
comprehensive customs reform in most of the product categories in accordance with the
3 tariff lines structure (1, 5, 10 percent) for different stages of goods based on the value
added escalation concept. To date, the tariff reforms have been completed with 70
percent coverage, and the next step would be tariff review on agricultural products. The
42
government is considering introducing tariff exemption (0 percent) for imported raw
materials. It is expected that the reform would also prepare the Thai industries for
greater trade liberalizations through free trade areas.
Under the Roadmap, the Government also plans to introduce new taxes with the goals to
expand the tax base and increase the proportion of direct tax relative to the total tax
revenue. New taxes under consideration of Ministry of Finance are such as property tax,
environmental tax and death tax which can be categorized into 3 types: estate tax,
inheritance tax, and gift tax.
43
CONCLUSION
In any given economy, efficient and effective tax structure and administration is crucial
to the fiscal sustainability and ultimately the country’s national economic and social
development. In recently years, the Ministry of Finance has given high priority to
modernize our tax structure and administration. Numerous initiatives such as e-revenue,
e-excise, and e-customs have greatly facilitated the tax-payers in their dealings with the
tax collecting agencies and also serve to reduce opportunities for tax evasion and
corruption.
Nonetheless, there are remaining issues that need to be reformed to further enhance
Thailand’s tax system. The paper highlights a few major issues summarized as follows:
1. The tax structure needs to be reformed with views to promote national
competitiveness and fiscal sustainability.
2. Tax administration needs to be more effective. The ratio of tax revenue to GDP for
Thailand is still relatively low despite the legislative tax rates that are mostly no less
than other countries.
3. Tax structure should be reformed to promote greater equity. The Government should
increase the revenue from direct tax relative to indirect tax.
4. Local governments should have greater capacity to raise their own revenue and have
more financial independence.
These are four issues that the Government would be concerned about in proceeding to
reform the Thailand’s tax system.
Appendix 1: Government Revenue (FY 1998-2003)
Unit: Million Baht
1998 1999 2000 2001 2002 2003 Government Revenue
Revenue Share Revenue Share Revenue Share Revenue Share Revenue Share Revenue Share
TAX REVENUE 723,867.60 98.69 684,303.00 96.54 717,338.10 95.63 770,320 98.1 849,255.00 98.14 994,673 97.76
1. Income Tax 227,741.30 31.05 225,762.50 31.85 248,083.40 33.07 267,969.7 34.13 297,914.00 34.43 347,941 34.20
1.1 Personal Income Tax 122,945.00 16.76 106,070.50 14.96 91,790.10 12.24 101,148.7 12.88 108,371.00 12.52 117,309 11.53
1.2 Corporate Income
Tax
99,480.10 13.56 108,819.90 15.35 145,554.10 19.41 149,666.6 19.06 170,415.00 19.69 208,859 20.53
1.3 Petroleum Income
Tax
5,316.20 0.72 10,872.10 1.53 10,739.20 1.43 17,154.4 2.18 19,128.00 2.21 21,773 2.14
2. General Sale Tax 270,962.20 36.94 226,296.20 31.93 213,002.20 28.4 231,664.3 29.5 246,132.00 28.44 279,742 27.49
2.1 Business Tax 341.7 0.05 185.5 0.03 126.1 0.02 83.9 0.01 99 0.01 331 0.03
2.2 Value Added Tax 232,387.60 31.68 201,975.80 28.49 192,509.70 25.67 215,318.1 27.42 228,196.00 26.37 261,306 25.68
2.3 Special Business Tax 35,241.10 4.8 21,311.40 3.01 17,015.30 2.27 12,851.7 1.64 13,715.00 1.58 12,757 1.25
2.4 Stamp Duty 2,991.80 0.41 2,823.50 0.4 3,351.10 0.45 3,410.6 0.43 4,122.00 0.48 5,348 0.53
3. Excise Taxes 155,424.60 21.19 163,733.90 23.1 164,822.60 21.97 177,386.4 22.59 206,133.00 23.82 255,171 25.08
45
1998 1999 2000 2001 2002 2003 Government Revenue
Revenue Share Revenue Share Revenue Share Revenue Share Revenue Share Revenue Share
3.1 Tobacco Stamp Duty 28,559.60 3.89 26,655.30 3.76 28,133.60 3.75 32,309.8 4.11 31,697.00 3.66 33,289 3.27
3.2 Petroleum and
Petroleum Product
Tax
65,372.90 8.91 66,583.50 9.39 64,832.00 8.64 64,124.3 8.17 68,840.00 7.95 73,605 7.23
3.3 Spirit Tax and Spirit
Fines
20,257.30 2.76 22,800.40 3.22 8,275.70 1.1 8,932.9 1.14 22,290.00 2.58 25,676 2.52
3.4 Beer Tax 23,190.70 3.16 24,991.80 3.53 26,437.80 3.52 29,990.7 3.82 31,650.00 3.66 36,987 3.64
3.5 Beverage Tax 7,023.10 0.96 6,483.80 0.91 7,444.20 0.99 8,100.3 1.03 7,748.00 0.9 8,621 0.85
3.6 Electrical Appliance
Tax
1,003.10 0.14 903.6 0.13 1,103.80 0.15 1,429 0.18 1,793.00 0.21 2,347 0.23
3.7 Automobile Tax 8,556.90 1.17 13,940.90 1.97 26,781.20 3.57 30,329.9 3.86 41,560.00 4.8 65,002 6.39
3.8 Others 1,461.00 0.2 1,374.60 0.19 1,814.30 0.24 2,169.5 0.28 555 0.06 9,644 0.95
4. Import-Export Duty 67,125.10 9.15 67,030.70 9.46 85,412.50 11.39 91,441.7 11.64 96,489.00 11.15 110,270 10.84
Deduct
1.Tax Rebates of the
Revenue Department
74,660.30 10.18 75,324.70 10.63 57,036.10 7.6 77,920.8 9.92 79,902.00 9.23 80,149 7.88
46
1998 1999 2000 2001 2002 2003 Government Revenue
Revenue Share Revenue Share Revenue Share Revenue Share Revenue Share Revenue Share
2.Allocation of Value
Added Tax to Provincial
Administrative
Organization
- - 2,994.40 0.42 3,198.50 0.43 3,739.6 0.48 4,109.00 0.47 5,042 0.50
3. Export Duties
Compensation
7,559.10 1.03 5,915.70 0.83 7,277.70 0.97 7,697.8 0.98 8,234.00 0.95 10,501 1.03
NET 733,461.20 100 708,825.50 100 750,082.40 100 785,257.5 100 865,385.00 100 1,017,466 100
Source: Fiscal Policy Office, Ministry of Finance
Appendix 2: Local Authorities' Revenue
Unit: Million Baht
Revenue Source 1998 1999 2000 2001 2002
1. Local Levied Taxes 8,901.1 9,501.3 11,355.7 12,760.4 13,355.1
1.1 Land and Housing Tax 7,314.6 7,696.1 8,326.7 9,547.6 10,045.1
1.2 Land Development Tax 712.6 752.1 766.8 705.4 807.2
1.3 Signboard Tax 817.6 814.3 834.1 881.4 949.5
1.4 Animal Slaughter Tax 56.3 68.2 52.4 91.7 52.0
1.5 Swallow Bird’s nest Duty - 170.6 79.0 85.4 92.2
1.6 Local Dev. Tax from Tobacco - - 1,060.1 1,294.5 1,198.2
1.7 Local Dev. Petrol. Stations - - 221.3 123.7 139.4
1.8 Local Dev. Hotels - - 15.3 30.7
71.5
2. Surcharge Tax 34,380.0 31,072.7 29,029.2 44,538.6 53,545.5
2.1 Value Added Tax 21,663.7 16,569.7 14,793.4 25,749.8 34,808.8
2.2 Specific Business Tax - 2,145.5 1,687.9 1,084.0 2,082.7
2.3 Liquor and Non-Alcoholic Tax 3,565.0 3,895.2 3,168.4 3,329.5 7,495.4
2.4 Excise Tax 9,151.3 8,462.3 9,379.5 14,375.3 9,158.6
3. Shared Taxes 13,773.6 13,184.4 15,939.9 18,923.6 19,372.7
3.1 Vehicle Tax 9,627.9 9,965.2 10,816.7 10,080.3 10,011.7
3.2 Land Registration Fees 3,444.0 2,517.7 3,908.0 7,427.5 8,034.9
3.3 Gambling Tax 165.4 139.6 121.2 128.7 104.2
3.4 Mineral Royalty 354.8 269.6 411.1 373.0 501.7
3.5 Petroleum Royalty 181.5 292.3 682.9 914.1 720.2
4. Others 513.3 612.8 126.5 181.3 1,131.8
Total Tax Revenues 57,568.0 54,371.2 56,451.3 76,403.9 87,405.1
5. Fees, Fines and License 1,260.4 1,382.7 1,656.8 1,656.3 2,370.0
6. Property Revenue 5,201.9 4,472.1 2,232.3 1,492.7 1,138.4
7. Social Service 241.4 242.1 330.9 381.3 442.4
48
8. Miscellaneous Revenues 1,154.1 2,210.0 1,827.9 1,459.6 1,731.1
Non-Tax Revenues 7,857.8 8,306.9 6,047.9 4,989.9 5,681.9
Total Current Revenues 65,425.8 62,678.1 62,499.2 81,393.8 93,087.0
9. Accumulate Funds 3,731.9 6,131.2 258.1 6,984.2 8,259.7
10. Loans 965.0 287.9 22.3 886.0 1,828.9
11. Others - - - 664.1 2,151.5
Total Special Revenues 4,696.9 6,419.1 280.4 8,534.3 12,240.1
12. Grant 30,630.0 38,127.2 32,222.1 40,367.6 58,382.4
General Grant 30,630.0 38,127.2 13,422.2 11,936.2 24,938.6
Special Grant - - 18,471.9 28,178.6 32,688.5
Provident Development Grant - - 328.0 252.8 755.3
13. Total Local Revenues ( LR) 100,752.7 107,224.4 95,001.7 130,295.7 163,709.5
14. Total Government Revenue
(GR)
815,680.3 793,060.3 817,594.7 874,615.7 957,630.0
% LR to GR 12.35% 13.52% 11.62% 14.90% 17.10%
Source: Fiscal Policy Office, Ministry of Finance
49
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