New Tax On Tutors, Medical Staff, Vendors Proposed

(24 December) The Revenue Department is considering a new tax to be imposed on tutors, medical personnel, and flea market traders.

Mr. Suthichai Sangkhamanee, Director-General of the Revenue Department, which operates under the Ministry of Finance, said the tutors should pay corporate income tax, personal income tax, as well as value added tax, depending on the size of their businesses.
The decision should be finalised by the end of 2014, and the Department will adopt the measurement from the Ministry of Education as a guideline to assess the profitability of tutor schools, said Mr. Suthichai. 
In 2010, Mr. Suthichai said, the Ministry of Finance has in fact considered a plan to gain more tax revenue from tutor establishments as proposed by the National Anti-Corruption Commission (NACC). It was estimated that taxing these tutor schools could generate up to 4-5 billion baht annually, but the plan was never implemented, according to Mr. Suthichai.
"Our department can collect revenues from tutor schools, but we have been reluctant to do so, since we view them as educational institutions," said Mr. Suthichai, "However, many schools have been exploiting the exemption. Many of them simply play video records of big name tutors to the students from all over the country".
He added, "We need to reconsider the appropriateness and the quality of these classrooms,"
Mr. Suthichai told our correspondent that he had instructed the officials to curb on the tax evasions by self-employed workers, namely; medical personnel and doctors. He said the new income tax system, to be implemented before the end of this year, would contain gaps for these individuals to evade tax payment.
“We need to make sure medical personnel abide by law. The Department needs to evaluate their real income, using their contract with the hospitals and real working hours”, said Mr. Suthichai.
Insurance companies will also be assessed by the Department, as many insurance brokers are required to pay value added tax of their earnings if they made more than 1.8 million baht each year. 
Therefore, many brokers took advantage of the unrestricted system to represent their family members to share the earnings and to avoid paying VAT, Mr. Suthichai alleged.
“We have allowed tax payers to use insurance for tax refund, so insurance company should squarely pay their taxes in real numbers”, he added.
Furthermore, the Revenue Department is currently studying the possibility to charge market stall owners effectively for their personal income tax, after they learned many traders make large sum of money from the flea markets and weekend markets, which is not registered to the department.
“It is difficult to charge stall owners taxes, as they come from other provinces other than Bangkok, which means the payment must be made in their hometown," Mr. Suthichai said, "We are currently studying the possibility to launch the new panel for tax payment for flea-market traders that are specifically divided from the current forms.”
He added that no legislation amendment would be necessary to impose these new taxes.


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