Preparing Your Business for Thailand’s Full Digital Tax Transformation within 5 Years
The Revenue Department of Thailand recently announced a significant step towards a modern, efficient, and more streamlined process of taxation. In the next five years, the country’s tax and customs system is set to become 100% digital. The department has highlighted plans to fully digitize tax and customs transactions by 2028, utilizing ‘Service Providers’ as vital intermediaries to streamline operations.
Lavaron Sangsnit, the director general of the Revenue Department, highlighted the department’s collaboration with the private sector in driving this change. Speaking at the recent seminar, “Driving Thailand’s Digital Tax Ecosystem,” Lavaron affirmed their goal to develop a fully digital tax system by 2028. This innovation aims to facilitate and streamline tax administration for businesses, making tax management more business-friendly.
The advent of digital tax brings along a plethora of benefits, including the elimination of paper-based management, faster tax refunds, and incentivized tax deductions for relevant investments. The Revenue Department welcomes feedback and cooperation from all related sectors to enhance the efficacy and innovation of their tax processes.
The transparency offered by digital tax systems makes it challenging for businesses to underreport income or overstate deductions, increasing the efficiency of audits and making it simpler for the government to spot inconsistencies or dubious activity.
Thailand’s tax landscape comprises five main pillars: Corporate Income Tax, Withholding Tax, Value-Added Tax, Specific Business Tax, and Stamp Duty. As this digital transition gains momentum, businesses across all sectors need to brace themselves to navigate this change effectively.
Here are 6 strategies and recommendations for businesses preparing for this transformation:
- Understanding Digital Taxation: The first step towards preparation is understanding what digital taxation means. The new system aims to eliminate the manual process of paying and filing taxes, and everything would be done online, from submission of tax returns to tax payments and communication with tax authorities. Digital taxation also enhances transparency and speed, reducing the possibility of errors that might occur in a manual system.
- Adopting the Right Technologies: Embracing the right digital tools and software solutions is key to a smooth transition. Software that automates the tax computation and filing process can be a game-changer. Consider seeking solutions that offer real-time tax calculation, compliance checks, and direct integration with the Revenue Department’s systems.
- Data Management and Security: The shift to digital taxation emphasizes the importance of efficient data management and robust data security. Ensure your business has proper systems in place to manage, back up, and secure sensitive data. Complying with data protection regulations and employing cybersecurity measures is not just a necessity but a prerequisite in the digital age.
- Training and Skill Development: Equip your team with the necessary skills to manage digital tax systems. This could mean training existing staff or recruiting new personnel experienced in digital finance and taxation systems.
- Consultation and Professional Guidance: Working with tax professionals or consulting firms familiar with the digital taxation environment can help businesses understand the changing landscape better. They can provide insights into the regulatory requirements, risk management, and the efficient use of digital tax platforms.
- Choose the Right Service Providers: Engage the services of reliable service providers who are familiar with the digital tax system and can provide necessary support. This can include IT service providers, digital tax software providers, and professional consulting firms.
Software systems like “NEXTTO Digital Business Solution” can help businesses accurately calculate their taxes, automatically file tax returns, and securely store tax data, streamlining operations while improving accuracy and compliance.
The shift to digital taxation offers an opportunity to revamp existing systems and adapt to more efficient, transparent, and streamlined processes. Businesses that proactively embrace these changes will benefit from the potential of digital technologies and the efficiencies they bring.
Thailand’s ambitious move towards a fully digital tax and customs system may pose initial challenges, but the long-term benefits in terms of efficiency, accuracy, and transparency promise to reshape the nation’s economic landscape and the way businesses operate. In an increasingly digital world, readiness is key, and Thai businesses must equip themselves for this upcoming tax revolution.
Disclaimer: The above information has not been independently verified. This investment brief is given for information only and does not represent an investment proposal, recommendation or advice to invest in the shares or business of the subject company. Additional information shall be made available to interested parties subject to the execution of the requisite confidentiality undertakings. The financial information, actual and/or forecast, provide herein is based on management representation.
