74% Of Thai Businesses Want More Tax Guidance – Even If It Means Paying More
The vast majority of businesses would welcome more global cooperation and guidance from tax authorities on what is acceptable and unacceptable tax planning, even if this provided less opportunity to reduce tax liabilities across borders, according to the latest research from the Grant Thornton International Business Report (IBR), a quarterly survey of more than 3,000 businesses in 44 countries.
The IBR reveals that globally, two-thirds (68%) of businesses would like more tax guidance. However, there was a marked divergence between regions with 75% of Eurozone businesses eager for more guidance compared to just 54% of their North American counterparts. Thailand (74%) gave a higher positive reaction reflecting the general ASEAN trend (86%). Similarly businesses in Latin America (85%) are more likely to look for advice compared with peers in Asia-Pacific (67%).
Edward Strauss, Partner of Grant Thornton Thailand’s Tax Consulting, said: “Reducing liabilities across borders can offer significant tax savings so it is interesting to see how open business leaders are to improving guidance and global cooperation. Very recently there have been high-profile cases involving Amazon, Google and Starbucks that have certainly sharpened public opinion as to what is acceptable tax planning. As the AEC draws closer and regional supply chains mature, this will become increasingly more and more relevant in our region.”
Thailand business leaders also differed from the feedback of global bosses who were more critical of what the tax regimes in their economies are set up to achieve; just 31% globally said their local tax laws and policies were geared to stimulate economic growth. In Thailand that figure was a more encouraging 58% however that was short of the ASEAN average of 70%. Senior executives in Southern Europe (11%) and Latin America (23%) were particularly scathing of how their tax dollars were being invested.
Thai businesses were a little more comfortable with the breadth of the tax base here too. 49% of business leaders globally, and 46% in ASEAN, believe their current tax regime does not bring enough economic participants into the tax base. In Thailand that figure was 30% which, whilst lower than these other regions, still suggest around one third of businesses would like to see a broader tax base in Thailand.
Thailand is in the top 10 of countries who believe their tax regimes are redistributing wealth efficiently in the country with only 10% of businesses disagreeing with that. This was very different from ASEAN (39%) and globally (41%) of businesses that believed their tax regimes were heavily weighted against the redistribution of wealth.
Mr. Strauss also noted: “Many mature economies around the world are undergoing severe fiscal retrenchment and business leaders are seeing taxes rise even as growth remains flat. The good news in Thailand is that businesses are broadly supportive of the way that taxes are distributed and spent. With the reduction in the corporate tax rate, coupled with reasonable growth, we are fortunately in a very different position.”