Thailand approves draft bill to tax foreign internet firms

Bangkok, Thailand. Photo: Jakob Owens/unsplash

Thailand on Tuesday approved a draft bill requiring foreign digital service providers to pay a value-added tax (VAT), becoming the latest country in Southeast Asia to seek to boost tax revenues from international tech companies.

Last month, Indonesia passed a law requiring big internet companies to pay VAT on sales of digital products and services from July, and in the Philippines, a lawmaker introduced a similar bill in parliament to tax digital services.

The Thai bill, which still has to be voted on by Thailand‘s parliament, requires non-resident companies or platforms that earn more than 1.8 million baht ($57,434.59) per year from providing digital services in the country to pay a 7% VAT on sales, deputy government spokeswoman Ratchada Thanadirek told reporters.

Thailand is expected to add about 3 billion baht ($95.72 million) to its coffers annually from the move, which will affect services such as music and video streaming, gaming, and hotel booking, she added, without naming any companies.

“These businesses would’ve had to pay VAT if they had been Thai, which is unfair,” Ratchada said.

Thailand, Southeast Asia’s second-largest economy, has mulled taxing digital businesses for years, hoping to tap the country’s internet economy, one of the fastest-growing in the region.

Thanawat Malabuppha, president of the Thai e-Commerce Association, told Reuters he welcomed the move, as it will help level the playing field for rival Thai businesses.

“Anyone who makes money from Thai people should pay taxes to the country,” he said.

Analysts say the COVID-19 pandemic has accentuated a push by governments around the world to tax internet companies, who could see a boost in revenues as people stay at home during global lockdowns.

Nearly 140 countries from the Organisation for Economic Cooperation and Development (OECD) are negotiating the first major rewriting of tax rules to take better account of the rise of big tech companies such as Amazon, Facebook, Apple and Google.

Southeast Asian regulators held talks last year on a region-wide effort to tax tech giants more, while industry groups have warned that over-regulation could blunt the region’s booming digital economy.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.