The cabinet has approved in principle a royal decree on new progressive rates of personal income tax to be implemented for the 2013 and 2014 tax years, according to government spokesman Teerat Ratanasevi.
The decree will expand tax rates from five to seven brackets, adding new tax rates of 15% and 25%.
The cabinet late last year approved new personal income tax rates at 5%, 10%, 15%, 20%, 25%, 30% and 35%. Existing rates are 5%, 10%, 20%, 30% and 37%.
The top tax rate falls slightly, to 35% of taxable income from 37%, while tax exemption for annual income below 150,000 baht remains in place. There are around six million people whose annual declared income is less than 150,000 baht.
Tax payers can apply for the new rate from Jan 1, 2014.
Mr Teerat said the new rates will benefit the majority of tax payers who are lower income earners, providing them with tax reductions of between 5% and 50%.
He added that the government hopes the tax reduction will help stimulate domestic consumption, allowing government to collect revenue from other sources, such as value added tax, to compensate.
The royal decree will be examined by the Council of State before legalisation.
