Thailand seeks to introduce value-added-tax to eCommerce businesses by next year, intending to collect ฿3 to ฿4 billion or around $98 to $131 million a year.
Electronic businesses are flourishing in Thailand. Entrepreneurs have the opportunity to sell products to customers via social media platforms such as Facebook, Instagram, and even mobile messaging apps.
According to the Electronic Transaction Development Agency, sales made through social media have reportedly doubled. The improvement of mobile banking apps has aided the industry to shoot sales up to ฿334.2 billion ($10.92 billion) in 2017.
The director-general of the Revenue Department Ekniti Nitithanprapas has mentioned that the tax proposal will be seeking parliamentary approval this year. The government targets ฿2 trillion ($65.4 billion) in overall tax revenue for the current fiscal year to September. The government is aiming for ฿2.116 trillion ($69.2 billion) in the following fiscal year.
Earlier this year, Thailand’s Revenue Department commenced proceedings that will help outline proposals for the eCommerce industry. In the first draft, the Revenue Department considered aspects to increase its revenue collection through businesses involved in eCommerce. Following the initial draft, the second proposal focused on VAT.
The Revenue Department identified the following as electronic businesses: catalog website, e-shopping, e-auction, community web, e-marketplace, stock photo, Google Adsense, Search Engine Optimization, affiliate marketing, and online gaming.
A popular vessel in Thailand’s eCommerce is fueled by Japan’s Line Corp. According to the Chief Executive Officer of Line Thailand Phichet Rerkpreecha, Line is set to launch an online grocery service in the country by the end of the year.
The online platform features a store allowing customers to buy and ship product. The service offers global shipping and accepts various payment methods including Visa, MasterCard, and PayPal.
The same company will also launch Line Shopping. It’s a platform that would allow sellers to connect with potential buyers through chat. The mentioned services will likely improve accessibility to goods through online methods, further improving the eCommerce industry.
As of date, Line has 44 million active users in Thailand or roughly 60% of the country’s population. The company has also launched a taxi-hailing and meal delivery service in Bangkok and three neighboring areas. Line aspires to expand this service to other locations such as Pattaya, Phuket, and Chiang Mai in the following year.
Line is said to partner with Visa in crafting seamless financial services to users in Thailand, as well as worldwide. Both companies have agreed to collaborate in different aspects including allowing users to apply for a Visa card within the Line app.
Both companies have also agreed to offer integrated loyalty programs and offer to its users. As for merchants, they will be able to utilize Line Pay capabilities at 54 million merchant locations that accept Visa around the globe. They will also be able to see transactions via their Line Pay digital wallet.
“Line Pay is more than just a payment method. As we transition to a cashless society, Line Pay is focused on delivering added value to Line’s users around the world and business partners. With Visa’s global network and infrastructure, Line Pay users will be able to enjoy the advantages of that innovative, worldwide network, ” said Chief Executive Officer of Line Pay and Line’s FinTech company Youngsu Ko, .
Ko asserts the benefits of transitioning to a cashless society with the advancement of virtual payment possibilities.
In the e-Conomy SEA 2018 report by Google-Temasek, the internet economy is predicted to reach $240 billion by 2025 in the Southeast Asian region. A contributing factor to this is the rise of eCommerce, online media, online travel, and online ride-hailing services. The development of electronic businesses has led overseas investors to fund.
Southeast Asia has recently produced $23 billion in eCommerce revenue in 2018, doubling the revenue made in 2017. With the numbers exposed, consumers will likely propel the shift from offline shopping to online, growing online expenditures even further.