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Tax breaks on life-policy riders to end next year
Bangkok Post – 17 November 2008
WICHIT CHANTANUSORNSIRI
Taxpayers will no longer be allowed next year to use health and personal accident premiums that are riders or additional contracts attached to life insurance policies for tax deductions.
According to a Revenue Department official, taxpayers will be allowed to claim only life premiums for policies with maturities exceeding 10 years.
Earlier this year, the government doubled to 100,000 baht a year the amount of life insurance premiums that individuals could deduct from taxable income.
The goal was to increase domestic savings and stimulate the slowing economy.
However, the official conceded that authorities had been too lenient in also allowing taxpayers to combine premiums paid for health and personal accident riders with premiums for their main policies.
"The department received a number of phone calls from taxpayers asking for directives for tax deduction, particularly for life insurance policies," said the official.
"We expect the Finance Ministry will get stricter next year in pursuing tax regulations for such riders to raise the government's tax income."
The Revenue Department has a target to collect 1.318 trillion baht in taxes in fiscal 2009, a rise of 9.1% from the previous fiscal year.
The target represents up to 74.5% of the government's total income.
The department exceeded its collection target by 6.6% in October, the first month of the 2009 fiscal year.
But overall government income was 9.4% below the target because of poorer performance by the Customs and Excise departments in light of the economic slowdown.
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