Thailand To Launch Value-Added Tax In 2020

Thailand hopes to annually collect 3 billion to 4 billion baht ($98 million to $131 million) by introducing a tax on tech businesses, Reuters reported on Monday (Aug. 26).

If approved by Parliament, Thailand will institute a value-added-tax starting next year on electronic businesses, leveraging the eCommerce boom in the country.

Ekniti Nitithanprapas, director-general of the revenue department, told reporters the tax will likely seek parliamentary approval this year. He said the government is targeting overall tax revenue of 2 trillion baht in the current fiscal year to Sept. 30 and is aiming for 2.116 trillion baht in the next fiscal year.

Thailand businesses are selling directly to people over Facebook, Instagram and messaging apps like Japan’s Line Corp. Sales via social media in Thailand more than doubled to 334.2 billion baht ($10.92 billion) in 2017, according to the latest report from the country’s Electronic Transaction Development Agency, thanks to improvements to mobile banking apps.

Further driving eCommerce in Thailand, Japanese chat app operator Line is set to launch an online grocery service in the country by the end of the year. The service — Line Man Grocery — will allow customers to have food and other items delivered, Line Thailand CEO Phichet Rerkpreecha said last month. In addition, the company is launching Line Shopping, a platform that connects buyers and sellers via chat.

Line currently 44 million active users in Thailand, which is around 60 percent of the population. The company has also introduced a taxi-hailing and meal delivery service in Bangkok and three surrounding provinces, with plans to expand into other major cities such as Pattaya, Phuket and Chiang Mai by next year.

In addition to its delivery expansion, the company announced in June that it was partnering with Visa to create new financial services experiences for consumers and merchants around the globe. The two companies plan to collaborate in different areas, including giving Line’s users the ability to apply for a digital Visa card, and eventually other Visa cards, within the Line App. The companies will also roll out integrated loyalty programs and tailored offers.