News No.   : 9/2007

Date              : 6 February 2007

Subject        : No additional tax for farmers.

--------------------------------------------------------------------------------------------------------------------------------

                        Currently, there are news that the Revenue Department (RD) will propose a measure to tax farmers at 0.75%. On this issue Mr. Satit Rungkasiri, the spokesperson of the Revenue Department (RD) clarified “We do not have plans to propose such measure. The provisions of tax law (Section 42 of the Revenue Code) stipulate clearly that income of a farmer from sale of rice cultivated by the farmer and/or his family will be exempt from income tax.”                         

                        It may be that the measure as appeared in the news is proposed by the private sector. According to the law since 1992, an exporter who is a juristic person that buys rice from another juristic person must be withheld tax at the rate of 0.75%. Upon the filing of mid year PND 51 or year end PND 50, the exporter may credit the withheld tax against the corporate income tax payable in the accounting period.

                        It is possible that such news may occur after RD officers examined certain exporters who are juristic persons and found out that they bought rice from juristic persons without any withholding tax. Instead, they made up fictitious documents that they bought rice from individuals. Therefore, the officers have advised those juristic persons to correct their mistakes.