Inheritance tax Edit-Cancel-Update Which type is good?

As news appeared that Prime Minister Settha Thavisin and as Minister of Finance The Ministry of Finance's proposal is being considered. In order to amend and improve the Inheritance Tax Act B.E. 2558 to make it fair and have more revenue flowing into the state.

It was found that since the law came into effect in 2559, the said inheritance tax has not been collected at all. Tax collection began from 2560 until 2565, collecting a total of 1,480 million baht. In 2565, approximately 685 million baht was collected.

By the Ministry of Finance The target is to collect taxes at 4,000 million baht per year. Therefore, the Ministry of Finance It is being proposed to increase the collection rate and improve the gaps in the law. In comparison with other countries, Thailand's tax rate is low. Compared to countries in the region such as Japan and South Korea, which have tax rates ranging from 10 percent to 50 percent, this news must cause concern for those with inherited assets.

As someone who has studied inheritance tax and written an explanation Inheritance and gift tax laws and has acted as a tax legal advisor in this area for quite some time. He is also one who expressed his opinion that he disagreed with the collection of inheritance tax. In the first presentation Because I believe it won't be worth it. and cannot truly reduce inequality

In addition, it will make money and various stocks. flowing out to live abroad Especially a large number of financial institutions in Singapore and Hong Kong. This has already happened when the Inheritance Tax Act was introduced in 2559, so if there is news there will be further improvements to this law. There will still be money and assets flowing out to foreign financial institutions again.

I once wrote an article in Forbes Thailand magazine after the law had been in place for 2 years, titled "Does the inheritance tax law really meet the needs of the country?" (August 2562) giving the opinion that This law will not answer the questions and achieve the results that the government has set out to achieve. The law should be repealed. It is clear that throughout the past 5 years this law has been in effect. Total tax collection rate A lot lower than the set criteria.

My proposal is also in line with the academic work of the Faculty of Law's Master's degree program. Chulalongkorn University by Ms. Atchariya Tadthiam, topic: “Assessing the Achievement of the Inheritance Tax Act B.E. 2558 under the Act on Criteria for Drafting Laws and Evaluating the Achievement of the Act B.E. 2562” that The law does not pass the criteria for evaluating legislative achievement.

The said academic document is proposed to be improved. Amendments to many laws Whether it is reducing exemptions, inheritance value to be less than 100 million baht, using progressive tax rates, collecting taxes from spouses. and the proposal to establish a trust in the country

If there is to be such an amendment, the government must enact an emergency decree or royal decree. An ordinance that must be passed by the legislature.

I have the opinion that Even if there is a proposal to amend the said law The government will not achieve its objective in collecting inheritance taxes anyway. Because there are many methods of inheritance tax planning, especially the transfer of assets abroad and other methods. The important thing is that Thailand will not be able to compete with Hong Kong and Singapore to become a financial, trade, and investment center. in this region

So I have the opinion that The government should abolish inheritance and gift taxes. But the Revenue Code should be revised in the personal income tax section. By canceling the exemption from income tax. Received from inheritance in Section 42 of the Revenue Code Along with the improvement of the stamp duty law for registering the transfer of ownership of real estate. Including the cost of registering the transfer of inherited property at the Land Department. At present there is a very low tax rate. Changing the method of collecting such taxes will definitely be beneficial and create income for the government that is worth it, as will be discussed in detail next.

Background : Inheritance tax is not new.

The truth is about inheritance tax law. It's not new. That happened in the year 2558. Thailand used to have an inheritance tax. At the rate of 20 percent, collected from the estate according to the Inheritance Tax Act since 2476, at which time tax was collected from the estate. At the rate of 1-20 percent of the value of the inheritance worth 10,000 baht, which if compared to the current value It would probably be worth more than 100 million baht.

But this law was used for only 11 years and was canceled during the reign of Field Marshal P. Pibulsongkram, while the inheritance tax law was in use. The government therefore has exempted people from income tax. According to the Revenue Code which is the correct principle Because the money is the same There should be no double taxation.

However, After the inheritance tax was abolished in 2487, the government did not cancel the exemption from income tax from such inheritance. In terms of tax law, it can be considered a gap in the law. that makes the inheritors and the inheritance No income tax had to be paid until now

Therefore, the Ministry of Finance's proposal To increase the inheritance tax rate to be equivalent to that in foreign countries or amend it to make it more efficient. I also thought that it would not solve the problem of setting a revenue target of 4 billion baht, but it would cause negative effects, causing assets to be transferred to foreign financial institutions again. Especially Singapore and Hong Kong. that does not have inheritance tax These countries collect a high stamp duty tax on real estate transfers based on the value of the real estate.

I understand the problem of increasing income for the country. and reduce inequality in the country, but over the past 5 years, everyone can probably see that the goals that the government of Prime Minister Gen. Prayut Chandra-ocha set were not achieved. And it's not worth it at all.

An offer : Cancel and then change.

Therefore, if the government wants to earn additional income In order to reduce inequality in this matter, I have a proposal for the government to consider as follows.

Article 1 repeals the Inheritance Tax Act 2558 and the giving tax according to the Revenue Code. There is a complete evaluation of the effectiveness of the law.

Article 2 When the Inheritance and Granting Act is repealed The exemption from income tax on real estate and movable property should be repealed. Then determine the collection of income tax of the natural person who receives the inheritance according to the Revenue Code. By determining the value of income tax. In the transfer of real estate and movable property Those with an appraised value exceeding 50 or 100 million baht, as the case may be, will be subject to income tax at a progressive rate ranging from 5-10%.

Item 3 increases the stamp duty tax rate. in transferring real estate or stocks both on the stock exchange and off the stock exchange received from inheritance with a value exceeding 50 or 100 million baht at rates ranging from 1-5%

No. 4 If the stamp duty fee is not increased, the fee for registering the transfer of ownership may be increased. in real estate according to the Land Code In transferring immovable property that is an inheritance For the value of real estate in transfer with a value exceeding 50 or 100 million baht, the rate will not exceed 5%.

How to amend the law Revenue Code according to the above proposal It will definitely make the government more money than the inheritance tax. The government may use real estate transfer figures and stamp duty. and ownership transfer fees for the past 5 years to analyze the financial estimate to see whether it is actually better than the inheritance tax or not. However, this proposal will not affect competition with foreign countries. Especially Singapore or Hong Kong. where there is no inheritance or gift tax

In addition, people with inheritance values ​​not exceeding 50 or 100 million baht will not be affected by this law improvement. This is due to the tax money collected. The government should set up a special fund to further reduce inequality in the country. In order to make taxpayers feel that Income taxes are used to actually reduce inequality.

In fact, the government should speed up reform of the entire tax law system at the same time, whether it be Value Added Tax. Land and building taxes In increasing income and reducing inequality in Thailand, it has been seriously successful. Which I will write and present in the next order.