We are late with this post, but want to draw attention to yet more tax avoidance by Thailand’s tycoons. Of course, the rich in Thailand don’t pay much tax (nor, it seems, do they anywhere else – e.g. Britain, Australia, US, Malaysia).
As reported at the Bangkok Post, the Ministry of Finance has inheritance and gift taxes in place from 1 February. A tax on those making gifts while still alive, this move has been anticipated for some time, with the tax ranging between 5 and 10% on transfers exceeding either 20 million or 100 million baht, depending on the relationships between the parties involved. The report states that spouses remain exempt.
According to the Post, this anticipation has caused a wave of transfers meant to beat the 1 February deadline. It states that:
… [s]hares worth nearly 80 billion baht have been transferred by affluent Thais to their heirs before the introduction of inheritance and gift taxes…. Executives and major shareholders of more than 160 listed companies transferred their shares to children, spouses, parents, siblings, cousins and holding companies from July 2014 to last Friday, according to a Securities and Exchange Commission (SEC) reports on changes of executives’ securities holdings.
The Post has a useful graphic that we have clipped and added to the right.
The assets subject to the tax “include property, securities such as treasury bills, bonds, shares and debentures as well as investment units, deposits, registered vehicles and financial assets to be described in royal decrees.”
The list of those transferring stock in order to avoid the tax includes Prasert Prasarttong-Osoth, “the founder of Bangkok Dusit Medical Services Plc (BDMS) and Bangkok Airways Plc, transferred his stakes in both listed companies with a combined worth of over 10 billion baht to his wife and children…”. The report adds that he is “the richest businessman on the Thai stock market last year, transferred 9.96 billion baht worth of BDMS shares to his wife and children and another 868 million baht worth of Bangkok Airways shares to a daughter.” Last year Forbes listed him as 8th wealthiest in Thailand with assets worth $2.8 billion.
Another almost 8 billion baht worth of BDMS shares were transferred to family members by other major shareholders.
Thailand’s tax regime has long been regressive, and as elsewhere, the rich have many ways to avoid contributing to the common good.