The impact of taxes on government assistance projects

Abstract

This paper studied and collected information from related laws of the Revenue Department and government policies involved with government assistance projects to help people and entrepreneurs to stimulate spending, to help alleviate the burden of people's expenses, enhance liquidity for entrepreneurs in order to have income during the coronavirus disease 2019 (COVID-19) outbreak and revitalize domestic tourism by focusing on supporting the grassroots economy and revitalize the country's economy as a whole. The Revenue Department has continually enacted laws during the year 2020 - 2021 to exempt personal income tax for people participating in the project. As a result, they do not have to combine the income received from the government assistance projects to be their assessable income for filing returns and paying personal income tax; however, such laws do not apply to entrepreneurs participating in the projects. Therefore, if entrepreneurs participating in the projects are considered to have assessable income under Section 40 (8) of the Revenue Code and if the assessable income is received in any tax year up to the criteria prescribed by law, they shall have a duty to bring the assessable income received to submit a personal income tax return or corporate income tax, as the case may be. Moreover, If the entrepreneur has a business income of more than 1,800,000 baht per year, they are obliged to register for VAT as well as behave properly as a VAT registrant, such as issuing tax invoices to buyers, collection of VAT on the sale of goods or services and submit a monthly VAT return, etc.

In addition, for the benefit of checking the accuracy and completeness of the tax return filing of the Revenue Department and it also prevents operators' problems that may arise from tax audits in the future which causes the burden of penalties; surcharges; fines; or may be seized at auction, entrepreneurs participating in the projects should prepare themselves by creating income - expense accounts to record the details of daily receipts and payments as well as to keep the evidence supporting the recording of the transaction to confirm the correctness and completeness of filing returns and paying personal income tax or corporate income tax.  Apart from being useful for tax audits, the income - expense accounts also useful for entrepreneurs in planning future business management and control the current business operation to be appropriate in setting the selling price cost control and cash management of the business to avoid lack of liquidity as well.