Conflict, Legitimacy and Government Reform: Equitable Allocation of ...
Conflict, Legitimacy and Government Reform: Equitable Allocation of ...
Conflict, Legitimacy and Government Reform: Equitable Allocation of ...
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Panel Discussion<br />
One problem is that governments <strong>of</strong>ten have tax relief policies.<br />
Most recently, Somchai Wongsawat’s administration waived personal<br />
income tax for those with taxable income below 150,000 baht per year,<br />
thus shrinking a tax base (taxpayers). Another problem is tax collection<br />
issue <strong>and</strong> tax evasion is rampant. Individuals working in the private<br />
sector earning a very high income can hire a legal advisor to help them<br />
pay minimum personal income tax. Many government <strong>and</strong> state<br />
enterprise employees who have withholding tax deductions don’t submit<br />
an income tax return form with full details <strong>of</strong> their incomes. Failure to<br />
submit an income tax return form is considered an <strong>of</strong>fence but this has<br />
been neglected along the way. If any government wants to enforce this, it<br />
will lose popularity. Everyone knows that many government <strong>and</strong> state<br />
enterprise employees earn higher income than their regular wages <strong>and</strong><br />
salaries, as observed from their cars, houses <strong>and</strong> other tangible aspects <strong>of</strong><br />
their st<strong>and</strong>ards <strong>of</strong> living.<br />
In light <strong>of</strong> these problems, the number <strong>of</strong> income taxpayers has<br />
declined constantly from 6.8 million in 2003 to 5.7 million in 2006.<br />
(Songtham Boonyawan <strong>and</strong> Thitima, 2007) In 2008, a total <strong>of</strong> 8.6<br />
million people filed income tax return forms (if husb<strong>and</strong> <strong>and</strong> wife filing<br />
joint tax return forms are counted, the number might be around 12-13<br />
million) In the end, the number <strong>of</strong> people who really pay income tax<br />
might be only around 5 million out <strong>of</strong> 38 million workers in the<br />
country.<br />
As for private companies, the number <strong>of</strong> companies that pay<br />
corporate income tax totals around 301,000 out <strong>of</strong> 546,857 companies<br />
throughout the country. In most cases, this is because the government<br />
gives a tax waiver but there is also tax evasion issue.<br />
In conclusion, studies revealed that the poor bear a greater tax<br />
burden than the rich when considering the proportion relative to<br />
income. This is because Thai government depends on indirect taxes more<br />
than direct taxes, faces problems with a narrow tax base <strong>and</strong> rampant tax<br />
evasion. So, any plan to raise government’s revenue from taxation must<br />
take these issues into consideration. The study on fiscal system <strong>of</strong><br />
Thail<strong>and</strong> conducted by Hyun Hwa Son that addressed these issues<br />
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