OPINION

Consider real tax reform

Re: "15% VAT plan has PM vexed", (BP, Dec 6).

Finance Minister Pichai Chunhavajira appears to have his thinking hat on back to front.

Firstly, he seems to think the OECD is calling for a maximum corporate tax rate of 15% to use as a justification for lowering Thailand's corporate tax rate from 20% to 15%. In fact, the Pillar 2 OECD initiative is quite the opposite.

It is designed to ensure multinational enterprises with an annual turnover of at least €750 million (27 billion baht) pay a "minimum" effective tax rate of 15% on their worldwide profits, no matter where these profits arise.

Secondly, the minister wants to increase Value-Added Tax (VAT), which is much loved by finance ministries around the world for its ease of collection, apparently believing this could serve as a tool to help low-income individuals and narrow the gap between the rich and poor.

But as every economist knows, VAT is generally considered a regressive tax. Simply put, VAT is a consumption tax, and poorer households spend a larger proportion of their income consuming the daily necessities of life.

So a higher VAT rate is bad for poor people, unless there are compensating direct transfers.

One can almost sympathise with the minister, playing as he does a key role in a government addicted to debt, but doubling VAT and lowering personal and corporate tax rates is not the path towards a more equal Thailand, neither is it the path towards fiscal sustainability.

Thai governments are running record budget deficits. Minister Pichai has even floated the idea of one final, giant 3-trillion-baht bite of public debt, to hit the legal limit of 70% of GDP. This would leave the country with no fiscal space and almost certainly increase our sovereign risk ratings.

Perhaps it is time for the minister to consider real reform of the country's tax structure, as unpleasant as it may be. Embrace the 51% of the workforce in the informal sector by making social security universal, tax wealth, especially land, appropriately, and close the myriad of loopholes allowing tax avoidance.

Ban benefits nobody

Re: "Well done to the Aussies", (PostBag, Dec 1).

Miro King the anti-social media man does not go far enough in protecting innocents from social media.

Newspapers were similarly a threat to established 17th-century society when their arrival on the scene began distracting adults from the important things in life: working for a pittance to maintain the existing status quo under threat from new-fangled Enlightenment ideals.

As for "infecting people with fake news and stories", has he not read some of the regular contributors to PostBag?

Has Mr King not read some of the main articles in the Bangkok Post; for example, that piece of unmitigated bias against the ICC in a recent opinion piece by the Israeli ambassador?

In the meantime, my government is making a mistake.

You would think they would allow parents to make such decisions for their own children, rather than assuming that all children under 16 are incompetent, uncritical idiots incapable of using social media to stay in touch with friends and share ideas with a wider group.

That some will use a tool incorrectly, even dangerously, is not in fact a reason to ban it for all.

It's an unwholesome precedent for the state to presume it is better able to raise children than their parents, although this notion of state superiority is an important element in all ideologies seeking utopia on Earth, from Christianity and communism to Islam and fascism, and of course, the local mythology whose very existence is held by the law as duly interpreted by the courts to depend on strict censorship.

Moving with the times

Re: "Well done to the Aussies", (PostBag, Dec 1).

Bravo Miro King. I am delighted to learn there is another brave soul out there who has the same opinion about the brain-sapping perils of social media.

I have shunned the various available options firmly and as a result feel safer and happily isolated from associated evils.

Thus I have the same thoughts about the alarming AI phenomenon, which hasn't a clue about the nuances of the English, and I assume, other languages.

Hollywood is equally disturbed.

However, with the way things are going, the scrap heap is looming for Luddites like me as well as my faithful desktop, which due to corporate blackmail will eventually become more electronic environmental pollution due to incompatibility with "progress", despite its relatively still youthful age.

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