Tax incidence : a case study of Thailand

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Pahirah, Manoon
Tax incidence -- Thailand, Taxation -- Thailand
thesis / dissertation description
This study investigates the tax structure of Thailand for the years 1969 and 1971, employing S-coefficients to measure, numerically, the gressivity of Thai individual taxes as well as the overall tax structure. In measuring tax burden distribution among the Thai people of different income classes, household income (a narrow income concept) and adjusted household income (a comprehensive income concept) are used as the income bases. Various empirical studies and institutional settings, as well as the observed behavior of the Thai economy, are employed in making assumptions as to the shifting and incidence of the Thai taxes. Investigation is also made, qualitatively, into the "implicit" or "excess" burden of the taxes due to tax evasion and a trade policy of import substitution of Thailand. This burden, if taken into consideration, affects the conventional method of tax burden measurement. Under a comprehensive income base, the Thai tax structure is found to be regressive approaching proportionality in 1969 (S = -0.010) but becoming more regressive (S = -0.063) in 1971. Compared with the burden of a tax distribution under a proportional income tax, the poor and the lower-middle class Thai bore a relatively higher tax burden than the middle-rich classes in both years. Measured in terms of Gini-coefficients, the regressivity of the Thai tax structure increased income inequality, which was already high, by 0.1 and 0.5 percent for 1969 and 1971, respectively. Some recommendations are made aiming at lessening the regressivity of the tax structure and raising more revenues from the Thai tax system.

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