On November 18, the Thai Cabinet endorsed a bill for an inheritance tax that, in essence, would impose a tax on bequests of more than THB50 million; it has a ceiling rate of 10 percent. The bill will first need final green light from the National Legislative Assembly, but that will probably be consummated by 1Q15 and thus ready for enforcement in 2H15.
With details on this proposed tax plan revealed so far, a comparison with other nations has been drawn, from which we see a similar pattern. In addition, our inheritance tax is actually more accommodating and relaxed than many other countries, especially a tax rate that is relatively low and an exempted estate value that is much higher than other states collecting this levy, where such value is under 100-fold of per capita income.
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Comparison
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Thailand
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US
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UK
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Japan
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South Korea
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Philippines
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Singapore
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Type of Inheritance Tax
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Inheritor
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Estate
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Estate
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Inheritor
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Inheritor
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Estate
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Estate
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Tax rate
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Max. 10%
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18 - 40%
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40%
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10 - 55%
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10 - 50%
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5 - 20%
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5 - 10%
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Exempted Estate value
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THB
50 million
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USD
5 million
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GBP
325,000
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JPY
50 mil.
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KWR
200 mil.
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PHP
200,000
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SGD
600,000
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Proportional comparison to per capita income (X)
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286.8
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94.1
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12.9
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13.3
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7.0
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1.7
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8.7
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This historic approval of the bill on an inheritance tax – upon which a definite schedule for enforcement has already been set – is the first such undertaking on this matter by the Thai government and confirms its commitment to decreasing social disparities. Nevertheless, solutions to social inequality in Thailand will need to include other fundamental reforms where opportunities for education, employment and access to financial facilities must be reconsidered. These issues pose a daunting challenge to the government in fixing, once and for all, rooted social inequality within the Thai society.
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