Thailand is set to impose taxes on all foreign goods sold through online platforms starting from January of next year. This move marks an end to the existing exemptions granted to low-value imports that are priced under 1500 baht (US$46.30).
Panthong Loikulnan, the director-general of the customs department, has said that the motivation behind this change is to establish a more level playing field for local businesses and to increase government revenue. He stated, “The absence of duties grants foreign goods an advantage over Thai businesses. This is particularly unjust to our SMEs.”
In the new system, all imported goods, regardless of their value, will be subject to customs duties and value-added tax (VAT) as mandated by law. This change is set to replace the existing tariff exemption which is due to expire at the end of this year.
Currently, imported goods priced below 1500 baht account for over 30 billion baht ($927 million) in annual imports.
Loikulnan has indicated that enforcing an average 10 per cent duty could generate at least an additional 3 billion baht ($92.7 million) in government revenue each year.
The system will primarily depend on data verification from online platforms. Random inspections will also be carried out to ensure compliance.
Thailand’s customs department has been engaging in discussions with major e-commerce operators, including Shopee and Lazada, to directly link their sales and import data.
Loikulnan stated that this reform will assist in leveling the playing field for domestic retailers who are already paying taxes, particularly the small and medium-sized enterprises that are affected by the surge of low-cost imported products.
He expressed concerns about the delay in implementing this process, stating that, “If we procrastinate, we will find ourselves at a disadvantage because all other countries are beginning to face the same issue: domestic sellers pay taxes, but foreign goods are imported tax-free.”
For the longer term, Loikulnan suggested introducing a “lump-sum tax”, which would be a flat rate of 20 to 30 per cent per imported package. He believes this would help simplify the system and increase its efficiency. However, he noted that such a change would necessitate legislative amendments and would require time to implement.
What is the motivation behind the imposition of taxes on foreign goods sold online?
The introduction of the tax is aimed at creating a level playing field for local businesses and increasing government revenue.
How will the system ensure compliance?
The system will primarily depend on data verification from online platforms, with random inspections being carried out to ensure compliance.
What is the ‘lump-sum tax’ that is being suggested for the longer term?
The ‘lump-sum tax’ refers to a flat rate of 20 to 30 per cent per imported package. This is aimed at simplifying the system and increasing its efficiency.
