Approaches to Improving and Developing Thailand’s Tax System

Abstract

The approaches to improving and developing Thailand’s tax system to ensure greater efficiency and alignment with the changing economic and social context consist of three key aspects. First, regarding the structure of Thailand’s tax system, it is evident that the current tax framework lacks systematic integration with the government’s revenue budgeting structure. As a result, tax policy formulation may lack adequate oversight mechanisms and could create long-term fiscal risks. Therefore, tax administration should be grounded in the principles of fiscal discipline, transparency, and public accountability. Second, with respect to the review of tax policies aimed at income redistribution and reducing economic inequality among the population, progressive taxation should be considered a significant mechanism for promoting economic equity and supporting the welfare state. Nevertheless, tax reform must also take into account the principle of tax neutrality in order to prevent tax avoidance and minimize distortions to economic behavior. Third, concerning the review of certain types of taxation that are no longer consistent with current economic conditions, it is found that capital gains tax on securities trading continues to be exempt despite the substantial growth of Thailand’s capital market. Accordingly, the tax structure should be reconsidered and adjusted to better correspond with the contemporary economic environment. Such reforms should be implemented gradually in order to minimize adverse impacts on investors and economic stability. In this regard, tax reform should emphasize the principles of fairness, transparency, and sustainability in order to enhance fiscal efficiency and support Thailand’s long-term economic and social development.