The tax man is so delighted that personal income and company profits tax rates are to be cut.
The B321 billion was 8.5 per cent higher than the target, mainly due to the government’s policy of tax refunds for first-car owners, the Finance Ministry announced.
Somchai Sujjapongse, director general of the Fiscal Policy Office, said the collection of excise tax from first-car purchase was B5.89 billion, 58 per cent higher than expected, while the expansion of domestic consumption has contributed B5.66 billion, a 10 per cent increase in the collection of value added tax (VAT) from the original target.
Revenue from the government sector was B4.1 billion higher than targeted, while state enterprises contributed B1.8 billion more than anticipated.
Mr Somchai said the state coffers also received B1.65 billion from the National Broadcasting and Telecommunications Commission and B1.95 billion from CAT Telecom.
The Finance Ministry received revenue from CAT Telecom much earlier than the expected delivery of May next year, he said.
He said the country’s economic growth and the positive signals of global economic recovery have boosted the Finance Ministry’s confidence in achieving the targeted tax collection of B2.1 trillion for the 2013 budget year.
Revenue Department director-general Satit Rungkasiri has announced that low earners will see their income tax cut by 50 per cent under a new tax structure, and top-rate payers will see a 20 per cent reduction.
Under the new system, workers now taxed at 30 per cent will see their burden fall to between 25 and 30 per cent, those taxed at 20 per cent will fall to between 15 and 20 per cent and those taxed at 10 per cent will drop to 5 per cent.
Consequently, people on the lowest incomes will see their annual tax payment halved, while the middle range will enjoy a cut of up to 30 per cent cut and top-rate payers will benefit from a cut of as much as 20 per cent.
Personal income will be subject to progressive tax rates by increasing the number of tax brackets from five to seven.
Taxable income up to B300,000 will be taxed at 5 per cent, while the first 150,000 baht will still be exempt from taxation.
Those earning B300,001 to B500,000 will be taxed at 10 per cent, while those earning B500,001 to B750,000 baht will pay 15 per cent and those earning B750,001 to B1 million bracket will have an unchanged rate of 20 per cent.
People earning B1,000,001 to B2 million will pay 25 per cent tax, down from 30, while those earning 2,000,001 to 4 million baht will pay 30 per cent and those earning more than 4 million baht will be taxed at 35 per cent, a nudge down from 37 per cent.
The new brackets will be effective for individual income earned from 2013.
Meanwhile, corporate income tax will be cut to 20 per cent from 23 per cent in the second half of 2013.
The new corporate income tax rate will be the second-lowest in the Asia-Pacific and Oceania regions. Hong Kong has the lowest at 17 per cent.