Tax Revenue for Gender Equality
The Revenue Department of Thailand

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
In the past the role of men in family units was a sole bread winner, women usually brought up children and overall household management. There has been an increasing role of women in the society that are working and earning income. This can be seen in the data from National Statistical Office 2012 which shows that 17,810,046 women are working, as well as the data from Global Entrepreneurship Monitor, Thailand Report 2012 which documented that Thailand has the highest rate of self employed women in Asia Pacific and South Asia. Nowadays, it is a common practice for women to work and for some instance become a bread winner of the family. However, personal income tax rules and regulations stated in the Revenue Code stipulated that husband and wife are considered as one entity if husband and wife earn income and both partners stay together throughout the whole tax year. The wife’s income will be considered as the husband’s income and the husband has the responsibility to file and pay taxes. If there are tax debt or tax arrears to be paid and the notice has been acknowledged by the wife for over 7 days, the wife must hold liability for this tax debt too. Income earners will be subjected to progressive taxation depending on their ability to earn money and file their income from the beginning of January to the end of March of the next calendar year. The current tax collection system penalises married couples in various ways. Firstly, gender equality: women become worse off than men because the Revenue Code considers the wife’s income as her husband’s income and the husband has the duty and responsibility to file income taxes. When problems of tax debt arise, the Revenue Code states that the wife must take half the responsibility of incorrect tax filing which is unfair to the wife. Secondly, inequality between married couples and singles: Married couples have to pay tax as a unit, by combining husband’s and wife’s income it pushes their income base to a higher tax bracket. Hence, there is an element of discrimination in the tax filing calculation for singles and married couples. Thirdly, family breaks up: As married couples face a higher tax burden, some women who are the bread winner of the family might divorce their husband to minimise tax burden. This break up affects the community and the society. Fourthly, it causes inequality among single women and married women because married couples are forced to include their income with their husband’s income forcing them to lose their rights in management of their own income because of tax rules. Finally, affects voluntary compliance: married couples are pushed up the higher tax bracket, thus, tax evasion takes place by not declaring the wife’s income or file the wife’s income in another form of tax entity (not as a family unit in order to avoid paying a higher tax rate).

B. Strategic Approach

 2. What was the solution?
The main responsibility of the Revenue Department (RD) under the Revenue Code is to collect 6 types of taxes namely; Personal income tax, Corporate income tax, Value Added, Specific Business Tax, Stamp Duty, Petroleum income to and propose tax policies to the Ministry of Finance. The RD is aware of the importance of the principal of taxation in creating fairness and equality, helping to improve society. Since tax is a tool to help redistribute income, high income earners should pay more taxes according to their ability to pay. The RD also aware that society has changed and people now demand more equality among women and men through human rights. Various organisations and groups of people are campaigning about human rights and gender equality around the world in different forms. As a result, the tax collection system for married couples does not correlate with today’s economic and social structure. Tax regulations and collections from husbands and wives are out of date and do not comply with the current economic and social environment as the laws violate their rights and erode their assets. The RD changed the regulations to eliminate problems of gender inequality by improving their right to manage their income, hence, improving human rights by complying with international practice. There have been numbers of studies and researches that have been undertaken, for instance, documents as well as data from the Council of State were looked into to gather and compare with other international tax laws and the findings divide into two groups, first; Countries that enforces rules for husbands and wives to file their return jointly: United States of America, France and Germany second; Countries that give options for married couples to file tax return separately or jointly: Japan, Singapore, Belgium and Australia. The findings were used as ideas to help the RD set criteria for collecting taxes of married couples fairly promoting gender equality among women and men. It also helped to ensure that the RD’s laws will not violate human rights. The RD worked with other organizations such as the Centre for Law and Development Faculty of Law Chulalongkorn University and experts to help improve old tax laws to make it comply with today’s environment to ensure fairness and equity in tax collection by setting up committee of experts from both public and private sectors including lecturers from universities, judges, juries, tax consultant from Lawyers Council of Thailand Under the Royal Patronage, Federation of Accounting Professions Under the Royal Patronage of His Majesty the King, the Federation of Thai Industries, Thai Chamber of Commerce, Board of Trade of Thailand, and Association of Business Operators to brainstorm and share experience of the best way to promote gender equality in the Thai society. The RD also setup the Gender Focal Point (GFP) to publish information and receive problems and suggestions. It also creates communication networks among women and men to help tax administration through an integrated work process that promotes gender equality and eliminates gender discrimination.

 3. How did the initiative solve the problem and improve people’s lives?
In the past, tax administration was a top down management especially when there is amendment in tax administration, according to government policy. However, the RD opened up and welcomed respected individuals and organisations to participate in giving comments, suggestions through meetings, seminars, and brain storming to help improve the administration. Participants included researchers, academia, business operators especially those involve with women right. The topics included gender equality, family unit and change in social and economic issues which provide opportunities for women to change their roles in society. These studies have supported the success in reducing the gap of gender equality. New regulations of tax payment by married couples are now clearer and more flexible. It also promotes understanding of tax regulations helping the citizens to pay taxes correctly as well as to bridge the gap of gender differences, status, occupation and educational background among the Thai people. In cases where couples earn income from businesses they operate together, they can split and file their income according to how they agree. Working with the private sector by allowing stakeholders to participate and share their comments has helped the RD to achieve in meeting the needs of the citizens.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
In 2002 the RD set up GFP to promote gender equality. Chief Gender Equality officer (CGEO) was promoted to ensure that there is gender equality and the RD complies with Optional Protocol of the CEDAW. The GFP published news as well as organised activities to exchange ideas and listen to comments and suggestions in order to promote high calibre women to hold high positions at executive level. At the same time, allow women to attain certain positions that women have never held before. Currently the RD has 14,636 female staff and 3,460 male staff. The RD also allows our staff to participate in meetings, conferences with various organisations in areas of gender equality to exchange information that will help integrate processes involved in tax administration that are based on equality between women and men. These led to the change in our tax filing regulations for married couples that complies with the RD master plan for gender equality. From 2007-2012 private participation from external bodies was allowed which include Centre for Law and Development, Faculty of Law Chulalongkorn University to jointly carry out studies and propose how to amend the Revenue Code in order to ensure that it can be easily understood. The following experts from both public and private sector including lecturers from universities, judges, juries, tax consultant Lawyers Council of Thailand Under the Royal Patronage, Federation of Accounting Professions Under the Royal Patronage of His Majesty the King, The Federation of Thai Industries, Thai Chamber of Commerce, Board of Trade of Thailand and Association of Business operators to brain storm and share experiences were involved in the studies to gather as much information and share valuable experience from the public to help solve the suggested problems. The RD gathered various findings of the projects recommendations relating to gender equality from the above stakeholders that have been complied over many years of research to include in factors to be considered in drafting of new rules and regulations for married couples in 2012. The RD proceeded with the legal process to enact an Act which allows married couples to separately file their tax returns like single people and the laws also allows married couples to combine their income and file their income together or they can take part of their income to combine with their spouse income and only file separately on salary income to reduce gender inequity to promote stronger family unit. Regarding human resources strategy, the RD has continuously prepared our staff for the changes in socioeconomic environment and culture by promoting good work habit/practice that everyone should be aware of and equity among women, men and human right in the office through GFP. Applying technology strategy has been employed to facilitate and continuously improve work processes, that include: issuing new tax filing forms that are suited to today’s life style of the households through internet filing which removed obstacles by allowing married couples who travels to work in different locations to be able to choose to file their tax returns together or separately depending on their preferences. Public relations campaigns through television, newspapers, leaflets, internet and all revenue offices have been used as a communication channel to ensure that taxpayers understand their rights allowing married couple to file their tax returns in many ways.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The amendment of laws and regulations for married couples would not be successful if we did not get cooperation from stakeholders who included individuals, groups of experts, private and public organisations who were involved in the study, compilation of data, advices, suggestions and support. Major stakeholders can be divided into four groups; First group: Married couples who both earn income; this group were affected directly from the previous rules and regulations. This group provided us with information through RD Call Centre telephone number 1161 and Government Contact Centre: GCC telephone number 1111 or through consultation letters. Second group: Individual and social organisations that are involved with human rights and gender equality such as Association of Women Lawyers of Thailand (AWLT), Office of Women’s Affairs And Family Development, including GFP as main coordinator among these representatives who were involved in sharing their ideas and suggestions on gender equality between women and men to assist the RD to set new rules and regulations concerning married couples in a way that the new rules and regulations will suit the current socioeconomic situation. Third group: Laws firms, business owners, academia; researchers were involved in the study, research, giving suggestions and recommendations that will lead to the amendment of tax laws that will be fairer and more equitable for both sexes. Fourth group: Government organisations, including the Ministry of Finance that support the initiative, the cabinet that approved the bill (rules and regulations) and parliament who will enact the laws.
 6. How was the strategy implemented and what resources were mobilized?
The RD had strategies for human resources management, technology, public relations and public involvement to help ensure the smooth administration of GFP. Regarding human resource management the RD set up board of director and working groups for three different areas: Board for gender equality chaired by Director General who gives policy and direction on how to promote gender equality, working group of Legal Affairs which amends tax laws to promote gender equality. The working group comprises of legal specialists, human right experts and tax specialists to give suggestions and comments as well as draft new tax laws to propose to the Ministry of Finance, Working group of GFP comprises of staff from all sections that help publicise, collect feedback, evaluate, carry out group discussions, meetings and comments from the public. The process helps ensure that there is transparency, good governance and gender equality in place. A greater share of budget for the administration of gender equality in every year plan since GFP was established has been allocated to promote gender equality in personal income tax filing. The administration of the project utilises good administration, publication, evaluation and coordination. To help ensure RD’s objective in promoting gender equality is achieved through improvement in ICT to make sure that our IT system can deliver online service including personal income tax filing, e-documents, e-publication, guide to tax filing, publication of new tax laws and keeping the public informed of the stages of the process.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
The results of establishing GFP and the participation by the public created a network of corporation from various organisations. These stakeholders helped the RD to understand their needs towards personal income tax of their spouses better and led to the implementation of gender equality master plan in 2007. The findings under corporation between the RD and other agencies also supported the RD’s proposal to the cabinet as well as to the parliament. This activity which led to the amendment of tax laws makes it fairer, easier to understand and consistent with socioeconomic situation. The in-depth study of what were the problems from the involvement of external stakeholders helped the RD to successfully gathered information and use in the proposal to successfully amend rules and regulations of personal income tax filing for married couples that was accepted by the citizens, society, government and parliament. Consequently, Royal Decree number 18, 2012 was enacted and came into effect for income earners filing their personal income tax in 2012 onwards. The decree can be summarized into four topics. First, husbands and wives married rightfully and both earn income, each spouse must file his/her personal income tax details like an individual. This eliminates the problem of gender discrimination and inequality as women and men has the right to file their income separately. Secondly, it allows married couples to choose to include his/ her entire income with his/her spouse as a family unit to support strong family ties and making it convenient to file tax returns. At the same time it does not force the couple to combine their income from employment together as a unit as they can choose to file separately. Thirdly, in cases where married couples earn income from operating business in areas of merchandise, agriculture, industry, transport, real estate together and cannot separate their share, the couple is allowed to file personal income tax separately by agreeing on the amount of contribution each makes. Moreover, the RD has increased additional benefits for income earners of married couple where both partner earn income each partner can deduct the full amount of the following child support, mortgage loan and leasing.

 8. What were the most successful outputs and why was the initiative effective?
The administration of GFP is under the CGEO. Hence, when the initiative to solve problems of inequality in tax filing between women and men came into action, GFP had to propose a report and how gender equality will be promoted to the executive to consider and approve. At the same time, GFP will have to discuss issues with the Board of Gender Equality who acts as consultant giving advice and suggestions to the GFP. This parallel operation helps ensure the amendment of rules and regulations on gender equality will effectively solve problems encountered by the citizen. Once the goal of solving gender inequality initiative has been sent to the practitioner in the working groups, the GFP would assist the working group by giving advice to ensure that their objective is to achieve the same goal in achieving gender equality. The working group will have to send progress report to the Director General from time to time should the working groups require support whether allocation of budget or ICT, the working groups can also request the Director General for approval. Moreover, the working groups also have to send progress reports to the CGEO and Board of Gender Equality too. Hence, the monitoring progress on gender equality in tax filing will be directed from policy maker to the practitioner and vice versa. This close operation will effectively drive the gender equality. In evaluating the success of the amendment in rules and regulations concerning Gender equality the RD proceeded with 2 stages. First stage, Amendment in rules and regulations concerns Gender equality the RD organised seminars and workshop inviting stakeholders to participate in giving comments and suggestions from the beginning of the project. Stakeholders include various women foundations and GFP, Ministry of Social Development and Human Security that are involved with gender equality. They were asked to comment how satisfied are they regarding the progress the RD has done. The stakeholders also suggested that the RD should adjust/amend its tax laws so they are suited with the current socioeconomic situation in Thailand. The second stage of the evaluation process, the RD put questionnaires on our website (www.rd.go.th) to get feedback on how satisfied stakeholders are with the progress the RD had done. The questionnaires indicated that both sexes were pleased to access gender equality in their tax filing.

 9. What were the main obstacles encountered and how were they overcome?
The major obstacle is changing men’s attitude towards women’s role, in the society is to change them from antagonist to become supporter. The RD had initiated concept by taking women power into account. These women inspired the public and the government to realize the problem of inequity, whereas mass media helps promote gender equality in the society. Another problem was the balance between the need of stakeholders and the extent to which we can amend the laws that will help create gender equality. The citizens want tax payments to be fair and equal, however, government needs to consider whether they will lose revenue should the government agree to allow amendment in the tax law, to promote gender equality. To achieve this the RD set up GFP to study information of other Revenue rules and how authorities around the world tax married couples whilst maintaining gender equality and freedom of choice for the married couple. To eliminate concern whether the amendment in tax laws will affect revenue collection, the RD assigned a research unit to study the effect if amendment was approved, the government will lose only 3.2 billion baht of tax revenue if married couples file their income tax separately. Another obstacle is the difficulty in amending the laws which the RD cannot act alone. The RD needs approval from the government and later an approval from the parliament. To solve the problem the RD had to compile sufficient information from all sides (information gathered by ourselves and obtained from studies from leading government institutions). The information is put used in our proposal to the government showing them where the demands to change personal income tax filing laws for married couples come from the citizens. Once the citizens agree to what has been implemented it triggers voluntary tax compliance.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
There were approximately 320,000 couples who register for marriage certificate each year. The number of these who filed separate tax returned was 136,611 in 2012 and 152,500 in 2013. In addition, single women and married women with an income that has the same amount of income and type of income for example single women with net income from rent of property of 750,000 baht per year will be subjected to tax at 15% when compared this to married women that has the same type of income and same amount of income. The married women will have to combine her income with her husband and file their income making the combined income higher and push them up to higher tax rate of 20% and even the highest tax bracket of 35%. Those who have been assessed wrongly causing them to have tax arrears due to marriage will be liable to criminal and civil laws for their wrong doing if filing incorrectly. This group will benefit from the change in rules and regulations in gender equality, and will only be liable for their income. In the past, when laws was drafted it may affect the husband for instance. The wife may not fully inform her husband of her income resulting in her husband filing the combined income lower than it should have been and the husband may be subjected to tax assessment and will have to take responsibility in paying a fine and surcharge for the amount of tax owed. Likewise, this can affect the wife, for example, the regulations which say wife must combine her income with her husband (except salary) for the purpose of tax payment. Hence, if there is a tax arrears and the wife has been informed or given notice at least 7 days in advance, the laws states that the wife must also take responsibility together with her husband in repaying the tax owed. This new laws considers husbands and wives as separate entities, but at the same time the RD has alternative options for married couples allowing them to plan their tax filing which helps them to save money for instance; married couple can file as a single entity (as husband’s income), married couple can file separately or married couple can file combined income as one entity (can be filed in husband’s or wife’s name). Furthermore, the RD also helps married couples that own and operate businesses together with new regulations which allow couples to average their income, splitting their income into half or they can split their income according to the proportion they agree upon and file their taxes. For example, if one of the spouses has income from a restaurant and earns 1 million baht, the couple can split the income into two, so both earn 500,000 baht. The benefits gained from the amendment of rules and regulations concerning gender equality are a pro-marriage campaign, it no longer discriminates and penalizes married couple causing “marriage penalties”, helping to build a stronger and healthier family because married couples do not have to save their tax by going through divorce. Each spouse can file their income separately to reduce their tax burden. In addition, there are other tax measures that help retain family units such as 15,000 baht deduction for child expenses, 2,000 baht child education and promoting first home ownership where couples can deduct 100,000 baht of interest from mortgages made before they got married. In all measures, each spouse can deduct the stated amount. Economic benefit, the RD’s indirect effort is to promote women to attain more knowledge and earn their own income. Nowadays, women play a greater role in society which increases household income by having more income, thus, higher purchasing power. Working women have the incentive to work because they have freedom to work and can choose how they want to pay their taxes. In 2012, data shows that working women have a combined income of 91,742,778,240 baht and in 2013 the value of this economy increased to 16.28%.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
The government, the RD and stakeholders have changed their perception towards gender equality through the amendment of rules and regulations amending for personal income tax purposes that meet the needs of both women and men. From 2012 onwards, married couples started to benefit from the amendment of rules and regulations regarding gender equality. Even though there are regulations that allow married couples to comply with the new rules and regulations on gender equality, the RD believes that to ensure its sustainability there must be a continuous learning process. Therefore, the RD continuously organizes seminars for the citizens to learn rules and regulations. The information is also available on the RD website. At the same time, staff within the RD will constantly be briefed on any new rules and regulations to ensure that all staff know and are capable to explain any new regulations to taxpayers, this include helping married couples answer questions at the time of their personal income tax filing period (January to March every year). This in practice makes it educationally sustainable. The RD has set up GFP to be the unit that promotes gender equality within the RD and also act as a bridge in cooperating and communicating with other organisations. This gender equality initiative helps determine the setting of future direction for customer service and all decision making and administration must take gender equality into account, hence, the action ensures institutional sustainability. The amendment process of the government is inconsistent with the equity principles, which any organisation can follow and adapt in the future. The beginning process of public private participation and collecting information from independent organisations has helped the RD to systematically study information and administration through the progress report from time-to-time. The action helps ensure that the process will be managerial sustainability. The RD established connections with academic institutions which is a good channel to help the RD receive feedback and concerns promptly. This helps the RD to access and evaluate progress which enables it to improve efficiency in administration meeting the needs of the public. Thus, the information obtained helps the RD to design policies of amend rules and regulations to help reduce the effects of inappropriate tax policies. The above actions help ensure operational sustainability within the department. The promotion of sustainability in gender equality has spread to other governmental organisations. This helps build stronger family ties through tax laws. The Office of Woman’s Affairs and Family Development who have proposed a draft of an Act concerning rights and liberty protection which stated that married couples should receive special personal income tax privileges from governmental organisations. However, this gazette is expected to be amended and enacted soon.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
The change in social and cultural perception has brought about the change in tax laws concerning gender equality. The RD executives have raised gender equality policy to be regarded as an important agenda to be solved. Setting up the gender equality master plan was pushed into effect throughout the organisation. These actions will not be a success without the communication and negotiations which senior executives of the RD had to present to the government, the opposition and other stakeholders to ensure that everyone is moving in the same direction. In addition, the RD believes that public private participation helped achieved our goal. The private participation starts from public hearings and ends in the evaluation process. However, the RD still lacks private participation at the stage of drafting up laws concerning gender equality laws, because this stage is an internal process of the RD, Ministry of Finance, the cabinet and the parliament. If the government allows private participation in drafting up laws, it will help with the issue of transparency and improve acceptance by the public. Another lesson learnt by the RD is the RD needs to be aware of any obstacles regarding rules and regulations that could be unfair or obstruct economic and social equality. Hence, the RD had to carefully assess, evaluate and plan to ensure that citizens will benefit fully. The RD should further expand communication channels other than existing fairness channels to receive more comments and suggestions from the public. The RD needs to integrate with other government organisations, for instance, Damrongdhama Centre set up by Ministry of Interior which accepts complaints from citizens or the hotline number 1111 of Prime Minister's Office. As it will help the RD to understand the citizens’ needs better. The RD should carry out public hearings every time there is any change to ensure that all points have been considered and covered by the stakeholders.

Contact Information

Institution Name:   The Revenue Department of Thailand
Institution Type:   Government Agency  
Contact Person:   Mr. Pipat Khanthong
Title:   Chief Gender Equality Officer of The Revenue Depar  
Telephone/ Fax:   + (66) 2 272 9160/+ (66) 2 617 3671
Institution's / Project's Website:  
E-mail:   dotdata@hotmail.com  
Address:   90 Phaholyothin 7, Phaholyothin Road, Phyathai
Postal Code:   10400
City:   Phyathai
State/Province:   Bangkok
Country:  

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