Tax work in the new global context: technology is the key

“I have been a native of the Revenue Department for 30 years, having worked in many divisions and sections. However, the world is changing rapidly today. Therefore, the management principles today must be different from 30 years ago in order to keep up with the global context, but must still meet the three main principles of the department: tax collection, tax measure proposals, and public service.”

For over 30 years, Pinsai Suraswadi has been involved in the Revenue Department, holding important positions such as Director of the Tax Planning and Academic Division, concurrently serving as spokesperson for the Revenue Department, and advisor on tax collection strategy for the financial and banking transactions group. In 2566, she moved to the position of Deputy Permanent Secretary of the Ministry of Finance, Head of the Revenue Task Force, before returning to the Revenue Department as Director-General of the Revenue Department on October 1, 2567.

Pinsai Suraswadi, Director-General of the Revenue Department, gave an exclusive interview to "Finance and Banking" magazine about her vision for the Revenue Department and its future goals, drawing on her experience as a long-time employee of the department for over 30 years.

“I have been a native of the Revenue Department for 30 years, having worked in many divisions and sections. However, the world is changing rapidly today. Therefore, the management principles today must be different from 30 years ago in order to keep up with the global context, but must still meet the three main principles of the department: tax collection, tax measure proposals, and public service.”

Taxes must be simple and fair.
Technology is the key

Pinsai said that technology is an important factor in driving the Revenue Department at present because with the development of technology, various agencies are affected by Technology Disruption, including the Revenue Department. However, on the other hand, technology can be utilized. Therefore, there is an intention to use technology to adjust the work process for the benefit of taxpayers.

“In the past, we were one of the first agencies to use IT in the work process, but it was used under the context of the tax structure that had been in use for a long time. We just changed from using paper to using electronics, but the mindset of the workers had not changed. Therefore, we intend to change the thinking of the workers and the work process to use more technology.”

The main mission of the Revenue Department is to collect taxes. Therefore, under Technology Disruption, the Revenue Department must further develop the tax collection process based on 4 principles:

1. Simplicity means making it easier for taxpayers to understand tax laws, combined with the use of technology to simplify the tax filing process. This should be coupled with education and the linking of taxpayer data with various government and private sector agencies to facilitate the tax filing process.

By linking data between different agencies, the Revenue Department will be able to bring scattered taxpayer data into one place. When it’s time to file taxes, taxpayers will be able to check their data on a single platform. The Revenue Department has already started doing this through the following projects:

• • One Portal It is designed to integrate all tax services into a single platform, aiming to reduce the burden of tax operations for citizens and entrepreneurs, and to enhance the user experience to be smooth, transparent, and modern.

In fiscal year 2568, the Revenue Department has upgraded its tax services by launching D-My Tax, which combines all tax services into a single portal. This system is designed to increase convenience, security, and promote voluntary compliance through easy-to-use and comprehensive use in a single platform, allowing taxpayers to conduct various transactions in one place. Currently, taxpayers can access various systems via D-MyTax, such as e-Filing, e-Donation, e-Appointment, etc.

“This system uses the Taxpayer Centric concept, allowing taxpayers to access all services through a single sign-on and easy to use with a single touch point to provide a uniform experience from using all services on a single platform, or a single experience.”

• • One Profile To make tax analysis and tracking comprehensive, up-to-date and reduce the use of official discretion, in order to create transparency, fairness and increase confidence in the tax system, with the goal of enabling income earners to track current information by collecting taxpayer information from various sources in a single system, such as:
    • e-Tax Invoice and e-Filing system that shows information about tax filing.
    • Information from international obligations such as the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) that provide information on taxpayers' foreign income and assets.
    • Information from external agencies such as banks, insurance companies or other government agencies.

“We understand that taxpayers want to pay less, while we want to collect more tax revenue. Therefore, we should meet halfway by making tax payment easy. The Revenue Department will create a system that will keep all taxpayers’ information in the same profile, including income, expenses, deductions, and donations. When it’s time to file taxes, they just need to check the information. If everything is in order, they can file. Or if they have tax obligations, they can pay it through the bank’s system immediately. At the same time, if they want a refund, it must be easy to get it through the system.”

1. 2. Convenience The goal is to make tax filing and payment online 24 hours a day, whereas the current system may be cut off at night. AI technology will be used to make the tax process as easy as possible for both taxpayers and the Revenue Department.

“We want taxpayers to be able to pay their taxes anywhere, whether they are in the country or abroad, at any time. Today, this is already possible to some extent, but we need to use AI to help make it even better.”

1. 3. Up-to-date Since the tax audits of the Revenue Department are not up-to-date, additional fines are charged to taxpayers. Therefore, it is important to audit the tax quickly and provide advice to taxpayers immediately if any errors are found.

“Slow and outdated tax audits can lead to additional penalties being charged to taxpayers, which can make taxpayers feel bad. We have heard many taxpayers say that they are happy to pay taxes, but they cannot afford additional penalties. Therefore, we have issued a policy that we must make tax payments up-to-date, and technology will be a key factor in helping because it is not only beneficial to taxpayers, but also to the Revenue Department.”

1. 4. Fairness By adhering to the principle of tax neutrality, if business operators do the same business or taxpayers conduct the same transactions, they must pay the same tax. At the same time, strictness must be exercised in cases of corruption, such as creating fake tax invoices or creating false expenses. If found, the Revenue Department is ready to take legal action immediately.

Ready for tax reform
Embrace the new world context

Pinsai said that in addition to using technology to make taxes easy, convenient, up-to-date and fair, which is something that has a positive effect on the country as a whole, the Revenue Department itself must also adjust at the organizational level. The goal is to use technology to adjust the work in various matters as follows:

1. Expediting tax refunds: Currently, the Revenue Department has a large backlog of taxes in its system, partly due to outdated and inflexible laws. For example, the current VAT refund process allows for refunds within 3 years if a business requests a refund over 10 years, but audits require reviewing the past 10 years. Therefore, there is a concept to use AI technology to eliminate the audit of the preceding 7 years and instead use human auditors for the last 3 years, thereby reducing tax refund processing time.

“Previously, we thought of using AI in the entire tax refund process, but after trying it, we found that it was not possible. So we changed our mind and used AI in unimportant parts to help reduce the time spent on work. The important work still needs to be done by people.”

2. Managing outstanding tax revenue: Currently, there is approximately 7-8 billion baht in outstanding tax revenue, of which about 1 billion baht is considered high-quality tax revenue. Efforts will be accelerated to find ways to collect as much of this high-quality tax revenue as possible.

“Of the remaining taxes of around 7-8 billion baht, there are quality taxes that can be released, around 1 billion baht, which we will urgently find a way to release. Meanwhile, most of them are low-quality taxes, which are like NPLs, such as taxes from drug cases or online gambling websites, which when prosecuted, there is no money to pay.”

3. Tax structure reform : The Revenue Department will proceed with tax reform to align with the changing global context. This tax reform will help support government revenue, ensuring sufficient budget for investment in projects that benefit the public.

“The Revenue Department will adjust every 5-10 years, and now is the time to adjust because the context of the world has changed, such as the aging society, green society, competition, which taxes are part of. Therefore, the tax structure must be adjusted to respond to these issues so that the people, the government, and the country can move forward. The idea is that some taxes will be reduced, but some will have to be increased.”

Tax revenue is the main mission.
Accelerate storage efficiency

Pinsai said that since taking office as Director-General of the Revenue Department on the first day, he has given the Revenue Department a policy to focus on revenue collection results as the main priority. In the first 3 months of fiscal year 2568 (October-December 2567), revenue was collected at 470,348 million baht, higher than the target in the budget document by 3,963 million baht, while the revenue collection target for the entire fiscal year 2568 is 2,372,500 million baht.

1. 1. VAT collection is high in line with domestic consumption that has expanded well from financial transaction groups, retail trade, household electricity usage, and the increasing foreign tourism sector.
   2. Personal income tax is collected high because

(1) Withholding tax from salaries expanded in line with the expansion of non-agricultural employment, such as tourism-related businesses after the government had a policy to stimulate tourism, exempting visas (Free Visa), such as hotels, the aviation industry, etc.

(2) Withholding tax on interest and dividends expanded due to higher interest rate on fixed deposits than the previous year and a significant increase in the amount of personal fixed deposits by commercial banks.

(3) Half-year calendar year tax filing (Por.Ngor.Dor. 94) has expanded from the fact that more taxpayers have requested to use the right to file forms via the internet in the last month of filing forms Por.Ngor.Dor. 94 for the calendar year 2567.

1. 3. Specific business tax is collected at a high rate because the Land Department collects taxes in line with the property market which has begun to recover from supporting factors such as lower interest rates on loans.

For taxes collected lower than the budget estimate, namely corporate income tax from the estimated half-year net profit, the collection was low due to the contraction of half-year profits of companies with accounting periods from April 2567 – March 2568 (Japanese period), especially in the automotive manufacturing, automotive sales and leasing businesses.

“I check the revenue collection data every day. When I see that there is something that is not on target, we have to discuss it. But with the cooperation of the Revenue Department, in the first 3 months of fiscal year 68, we were able to collect more taxes than targeted. But there is a challenge in collecting corporate tax revenue that will come in May 2568, which is expected to be negative. Therefore, in the first half of the year, we have to collect as much revenue as possible to reduce the impact. Whether we can do it or not depends on the science and art of encouraging the department’s people. We have to try to understand the officers as much as possible.”

Pin Sai continued that one of the important factors that will allow the Revenue Department to collect more revenue comes from increasing tax collection efficiency, which must be done as follows:

1. 1. Corporate tax collection The Revenue Department has implemented the framework of the Organisation for Economic Co-operation and Development (OECD) to address the issue of tax base erosion and profit shifting abroad as follows:

• • • Pillar 1 Reallocation of Taxing Rights The aim is to reallocate taxation rights of multinational enterprises (MNEs) to the countries in which the MNEs generate income or economic activities (market countries), in a move away from the previous regime that focused on the presence of a physical establishment in determining tax liability, which is inconsistent with the digital economy, where MNEs can generate profits in a country without having a physical establishment there.
    • Pillar 2 Global Minimum Tax The Revenue Department has issued the Additional Tax Act B.E. 2567, requiring Multinational Enterprises (MNEs) with revenue of not less than 750 million euros to pay tax at an effective tax rate of not less than 15%, effective from January 1, 2568, to preserve Thailand's tax collection rights and create clarity and certainty for multinational businesses investing in Thailand. It is expected to increase tax revenue by approximately 12,000 billion baht per year.

1. 2. Personal income tax collection The Revenue Department will prioritize bringing informal groups into the tax system, especially those in the online system, as online businesses and digital platforms are currently growing rapidly in the digital economy era, but there are still challenges in comprehensive tax collection.

Therefore, the Revenue Department has stipulated that digital platforms, such as e-commerce platforms registered in Thailand and with a revenue exceeding 1 billion baht, must submit income data of sellers of goods and services via the platform to the Revenue Department from January 1, 2567, with the preparation of special accounts to collect transaction data completely and transparently.

Another group that the Revenue Department prioritizes is the group that intentionally avoids taxes. The Revenue Department will use strict law enforcement measures, along with using Data Analytics and AI to analyze behavior to separate the group with intention to avoid taxes from those who do not comply with the law without intent, and will use criminal and civil measures against the group with intent decisively.

For those who do not intend to avoid taxes but find it difficult to perform their tax duties, the Revenue Department focuses on improving the law to make it easier and developing services to make it more convenient, such as developing an easy-to-use tax filing process, promoting the use of digital systems such as e-Tax Invoice & e-Receipt, and providing proactive advice to support businesses to comply with the law correctly.

In addition, the Revenue Department has studied ways to support low-income earners by being assigned by the Ministry of Finance to jointly study the feasibility of implementing Negative Income Tax (NIT) to solve poverty and inequality issues and help low-income earners through the tax system.

1. 3. Value Added Tax (VAT) collectionVAT)

(1) Tax collection from low-value goods: The Revenue Department has amended the law to require imported goods not exceeding 1,500 baht to pay value-added tax through the Vendor Collection Model (VCM). This approach is in line with OECD recommendations to create equality between domestic and foreign entrepreneurs.

(2) Support for the export sector: The Revenue Department will improve the VAT refund process to make it faster, with the aim of increasing liquidity for exporters, reducing obstacles to doing business and enhancing competitiveness in the global market.

This measure is also an important part of supporting the country's export sector amid the ongoing trade war that continues to impact international trade. This improvement will help exporters better manage their cash flow and increase their business efficiency in the long run.

“From the feeling of someone who has been here for 30 years, I would like to see the Revenue Department move forward by using technology to help make the tax process easy, convenient, up-to-date and fair, while still adhering to our main principle of collecting taxes that must be done straightforwardly. I have given a policy that tax collection is not collected for the department, but for the country, in which everyone is also a part of the country. And I believe that the Revenue Department can do it. I believe in everyone’s ability.”

Read other columns in the March 2568 issue (No. 515) of the Finance and Banking Journal, available in digital format: https://goo.gl/U6OnIi

Find all the ways to order Money and Banking magazine, both current and back issues, all in one place here: https://moneyandbanking.co.th/2023/18250/