Thailand’s New Inheritance Tax Levy Could Hit the Rich

Andrew Chamberlain

❖ Recently, Thailand’s regime

experienced a coup d’état by a military

supported contingent political group

❖ Wealthy Thais that had supported the

group must now be feeling the backlash

after the new regime recently signed off

on a new inheritance tax levy

❖ The proposed levy aims to collect 10%

on any estate or inheritance amount

valued at $1.5 million or more, and is

expected to be instituted roughly within

the next six months

❖ Also on the docket is another measure;

a property tax that could further tap

funds from the country’s wealthy elites,

including the particularly influential elites

that seem to pull the political and

economic strings in the region

❖ Ordinarily, you would most likely pair these populist redistributive

policies with more radical socialist movements that have sprung up

around the world since the economic crunch of 2008, movements

like the famed “Occupy Wall Street”, which called for redistributive

measures in the United States, and still continues to do so

❖ Furthermore, these policies echo several of the pro-poor programs

that were highlighted by billionaire Thaksin Shinawatra, who was

overthrown by Thailand’s military in May back in 2006

❖ However, the economy in Thailand has been staggering for months

following the coup, with GDP expanding by a mere 0.6% in the third

quarter from the same period last year, making this measure seem

more reactionary to unexpected slow growth

❖ What could be the cause of this? The answer lies in exports

❖ In recent years, Thailand has lost its

competitive edge, and the central bank

expects shipments to lie flat, or even contract

after 2013′s poor performance

❖ “Applications for fresh foreign investments

were held up by months of antigovernment

protests earlier this year that paralyzed much

of Bangkok, while investment in neighbors

such as Malaysia and Vietnam has picked up”,

reports The Wall Street Journal

❖ Moreover, Thailand seems to be missing the

boat in many other important sectors

❖ The central bank warned this summer that

Thailand’s dominance in the world market for

hard disk drives could be a liability, in light of

many in the rest of the world turning from PCs

to smartphones and tablets instead, as well as

opting for data storage on cloud storage

services instead of directly on hard disk drives

❖ Considering the worsening global economic picture

combined with the projection of contraction in exports

out of Thailand, there is a great deal of pressure on

Thailand’s new regime to find alternative sources to

generate revenue

❖ In particular, the government wants to find a way to

bridge the economic gap between Mr. Thaksin’s largely

rural supporters and the more conservative middle class

in Bangkok, many of whom supported the coup in May

Mr. Thaksin’s Statement

❖ “The government has

pledged some $11 billion for

infrastructure spending, as

well as cash handouts to rice

and rubber farmers, in part to

win over voters whom Mr.

Thaksin previously wooed

with virtually free health-care

programs and large rice

subsidies” states The Wall

Street Journal

❖ The proposed inheritance tax has been lauded by the

government as an attempt to ensure fairness amongst

the nation’s citizens, as well as impressing the idea that

everyone is equally invested in a strong and modern

Thailand in the future