Thai Finance Ministry planning new tax laws on e-commerce


Concerned that revenues from online sales of goods and services in Thailand are going solely to foreign-based social media companies, the Ministry of Finance last week established two committees to study the issue and help draft a new e-commerce law next year that would be similar to those in Europe and Australia.

Prasong Poonthanet, director general of the Revenue Department at the Ministry of Finance, said that multi-lateral IT giants such as Google and Facebook are making ‘huge profits’ as a platform for e-commerce in several countries but they mostly send their revenue out of those countries and so only pay a small amount of taxes.

In response, the Revenue Department’s ad-hoc committees will study laws government e-commerce in more developed countries and draft a law for Thailand based on laws found in those markets. The growth of e-commerce in the Kingdom should bring more benefits to the people of Thailand beyond simply providing more shopping choices, Prasong said.

He said several countries have laws that enable their tax officials to examine the revenue of multilateral IT corporations so that they can be adequately and appropriatelytaxed. He added that he expected the new law to be finished next year for submission to the finance minister for consideration.

In 2015, the most recent year for which complete statistics are available, there were 500,000 online merchants in Thailand, with 10,515 operating online stores on Facebook and 11,213 on Instagram.

More than 80 percent of digital consumers reported that theyuse social media to search for products or connect with sellers. Using social media to sell things has been dubbedsocial commerce and is regarded as a subdivision of e-commerce. Approximately 33 percent of Thailand’s e-commerce sales value comes from Facebook and Instagram.

Thailand was the second-largest online retail market in the 10-country Association of Southeast Asian Nations (ASEAN) in 2015, following Indonesia, according to Bain & Company which published the “Southeast Asia Digital Report 2016.” The report attributed Thailand’s growing e-commerce to social media purchases.

Bain predicted that Thailand’s online retail market wouldreach $10-15 billion by 2020, up from less than $2 billion in 2015. Thailand’s online retail sales are expected to account for 8 percent of the total retail market by 2020, up from 1.3-1.4 percent last year.

Facebook and Instagram are far from the only platforms that Thais are using to buy and sell goods. Other e-commerce giants, both domestic and foreign, such as China’s Lazada, have seen their sales steadily increasing in Thailand as well as the rest of ASEAN.

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