D-Day, Sept. 1, “The Revenue Department” collects foreign e-service tax, found about 100 foreign online platform providers who are subject to this tax, expecting to have an additional income of 5 billion.
On August 22, 1964, Mr. Ekniti Nitithanpraphat Director-General of the Revenue Department revealed that the e-Service tax is collected at a rate of 7% per year from foreign platforms that provide online services to users in Thailand. and has income in excess of 1.8 million baht per year, will begin to be effective in law on September 1, 64 by foreign online platform service providers in Thailand who register for tax via the VES system (VAT for Electronic Service) of the Revenue Department, 18 of the companies that are subject to this tax, a total of about 100. The Revenue Department expects that during the rest of August 64, there will be a gradual registration until the total number of 100 cases is complete.
“The Revenue Department has just started to open the VES system for registration on August 16. So far, 18 have been received. Must be considered a good response. We estimate that Thailand will earn about 5 billion baht per year from e-Service tax, but this is an estimate before the Covid crisis. During the COVID crisis, we find that using various online platforms greatly increased Thus, there is a chance that this portion of tax revenue will be higher as well.”
By studying the sample of 60 countries that have started collecting e-Service tax around the world, it was found that e-Service tax will help create fairer competition as in the past, Thai people who do business online and have Income over 1.8 million baht will be subject to VAT. But foreign platforms do not have to pay. Therefore, having this tax come up in addition to increasing income for the country. It will help to be fair to Thai entrepreneurs. and may incentivize new start-ups or even Thai unicorns
For concerns about whether the e-Service tax will be passed on from foreign service providers to Thai consumers or not? On this point, foreign lessons show that both are possible. If it is a service provider in a business that has many competitors in the market, such as watching movies, listening to music, the burden will not be pushed. However, in the case of service providers with few competitors, the burden may be pushed up as well.
“Taxation of e-Services is not an important factor for foreign companies in deciding whether to provide services in any country or not. Moreover, the tax rate of Thailand is not high compared to other countries such as in ASEAN Singapore held the same 7%, Indonesia held 10%, while European countries kept between 17-27%.
