BANGKOK, THAILAND – Tax policy emerged as a central battleground in the 2026 election campaign as the Democratic Party and the People’s Party set out competing reform plans for Thai taxpayers.
Democrats pitch higher allowances for salaried workers
Democratic Party deputy leader and prime ministerial candidate Korn Chatikavanij argued that personal income tax rules needed an overhaul to reflect sharply higher living costs. The party proposed doubling the annual tax‑free personal allowance from 150,000 to 300,000 baht. Korn said it was time for the state to prioritise middle‑income salaries, noting that workers earning 20,000 to 26,000 baht per month were now struggling more than in the past because income tax laws had not been updated for years.
According to his calculations, employees with monthly pay of up to 40,000 baht would pay no income tax on the first portion of their earnings and keep about 7,500 baht more per year. All taxpayers would benefit because the first 40,000 baht of monthly income would no longer be included in the tax base.
Revenue loss concerns and focus on households
Korn acknowledged that the proposal could cut state income by around 30 billion baht. But he cited data showing that the top 2 million of roughly 4.4 million actual income‑tax payers were responsible for about 90 percent of total personal income tax revenue. Easing the burden on the lower 2 million would therefore have only a limited impact on the budget, he argued.
At the same time, the Democrats wanted to keep taxpayers on the rolls. Instead of being completely exempt, beneficiaries would be asked to make a symbolic contribution of about 100 baht so they remained registered with the Revenue Department.
Critique of earlier corporate tax cuts
The former finance minister also pointed to the earlier cut in corporate tax from 30 to 20 percent under a Pheu Thai‑led government. This reduction, he said, had failed to spur investment as hoped and had mainly boosted profits and dividends for large, partly foreign, shareholders. That outcome had led to capital outflows rather than reinvestment at home.
The Democrats therefore wanted future relief to focus on households and the “little people” in the economic system, rather than further cuts to corporate tax. Any loss of revenue would be offset by a broader tax base and more efficient collection, particularly from companies.
People’s Party: incentives over enforcement
For the People’s Party, Sirikanya Tansakul said the party aimed to draw entrepreneurs into the tax system through incentives and lighter burdens, not tighter controls. On personal income tax, it wanted to raise the standard personal expense allowance from 60,000 to 100,000 baht, aligned with average annual living costs of about 74,000 baht. On value‑added tax, the party planned a gradual increase of the VAT rate by 1 percentage point per year when economic conditions allowed, without necessarily reaching 10 percent.
At the same time, Sirikanya called for compensatory measures to shield low‑income earners from hardship.
“In the first roughly three years, tax revenues may decline somewhat, but in the long term the state will benefit from better data and growing businesses.”
said Sirikanya Tansakul, People’s Party representative.
Three‑step SME plan and ‘receipt lottery’
In the area of SME taxation, the People’s Party linked its proposals to a “receipt lottery” scheme designed to reduce small businesses’ fear of entering the tax net. Step one would raise the annual turnover threshold for mandatory VAT registration from 1.8 million to 3.6 million baht, giving small shops more leeway and less paperwork. Step two would increase the flat expense deduction for individuals from 60 to 90 percent, reflecting an assumed profit margin of about 10 percent and sharply reducing tax liabilities.
Step three would introduce an optional flat VAT of 2.1 percent per quarter for businesses with turnover above 3.6 million baht, instead of detailed bookkeeping of all input‑tax invoices. SMEs joining the programme would receive a VAT refund voucher worth 50,000 baht, which could be used to offset taxes or finance efficiency measures such as hiring a bookkeeper.
Broader tax base and mandatory filings
Under the slogan “broaden the tax base, simplify, make it fairer”, the People’s Party set out wider reforms. In the first year, 100 percent of formally employed workers, including those insured under Section 33 and civil servants, would be required to file a tax return. The party planned to include all adults with taxable income from the first baht after deductions in the system.
Tax documents would be simplified and data systems linked, for example by obliging foreign work permits to be tied to a tax identification number. The party also wanted the personal allowance lifted to 100,000 baht and savings‑related deductions converted into direct tax credits at a single rate, instead of being subtracted from taxable income.
Land and building tax: closing loopholes
The People’s Party also proposed reforms to land and building taxes to close loopholes and reduce inequality. Notices would primarily be delivered electronically, and as a rule owners would be liable, with users paying only where private ownership was not permitted. Penalties for late payment would be cut sharply from 40 to 10 percent, or to 1 percent if paid before a reminder was issued.
A mild tax amnesty would allow arrears to be settled either by paying only the principal without surcharge or by applying the new, lower penalty rate. The party also wanted to “drastically” lower tax‑free thresholds for agricultural and residential land from 50 million to 5 million baht, while curbing “artificial” declarations of land use by adding new categories.
Consolidated land levy and legal changes
Local authorities would be able to set suitable rates within an upper limit of 3 percent, for example based on zoning plans or difficult access to plots. A consolidated land tax would apply to individuals with at least 50 Rai and legal entities with 1 Rai or more, at a maximum rate of 1.5 percent of land value, based on year‑end assessments by the Revenue Department.
According to the party, implementation would require amendments to the Revenue Code, royal decrees and changes to the 2019 Land and Building Tax Act.