Jul 21, 2016

    Million baht lucky draw to boost Thai tax revenue


    "Want to win a million baht? Go for e-payment," says Thailand's junta.

    It is offering a lucky draw as an incentive to use a new online payment scheme for business in an effort to bring some of the massive informal economy onto the books and boost tax revenues.

    Thailand is hopeful an e-payment scheme will add tax revenue of 100 billion baht (S$3.9 billion) a year.

    Finance Minister Apisak Tantivorawong estimates the move will save banks and businesses 75 billion baht a year, though other policymakers expect it could take some time for businesses to change their habits.

    Cash and cheques make up 80 per cent of transactions.

    A coup in 2014 ended political unrest but the generals have struggled to revive South-east Asia's second-largest economy as exports and consumption remain weak.

    To promote the scheme, the junta will next year offer consumers and merchants a monthly lucky draw of cash awards worth seven million baht for a year.

    Some 5.5 million baht will be for e-payment customers, with the biggest prize of one million baht and the rest for business operators that install electronic data capture machines.

    Under the system, transaction information is sent to the revenue department so the government "can see all trade flows, making tax avoidance more difficult", said Krisada Chinavicharana, head of the ministry's fiscal policy office.

    Tax evasion in Thailand is a major problem, with former Finance Minister Sommai Phasee estimating evasion may have cost it 30 per cent of VAT revenue.