The Revenue Department's demand for the interest income data of all depositors is aimed at closing a loophole used by some small banks in helping their customers shun paying a 15% withholding tax on interest, says Finance Minister Apisak Tantivorawong.
The ministry found that some small banks help their customers avoid the withholding tax payment for interest income, he said.
Such practices were not spotted at large commercial and state-owned banks, Mr Apisak said.
"The latest move is to create fairness in society," he said.
The Revenue Department has allowed commercial banks to prepare for issuing interest income reports for two years, Mr Apisak said.
The department's director-general issued a notification on April 4 demanding all depositors offer permission for banks to report their interest income information.
Those with an annual interest income of up to 20,000 baht are also required to consent in exchange for maintaining the 15% withholding tax income waiver.
Pinsai Suraswadi, principal adviser on strategic tax administration for the department, said the tax exemption for interest income of up to 20,000 baht a year is applied to all deposit accounts opened at banks by an individual.
If a depositor earns more than 20,000 baht in a year in interest from several accounts, he or she is still subject to the 15% tax for the value that exceeds the threshold.
As banks do not link their account information with other banks, some depositors exploit the loophole by breaking up deposits into several accounts at several banks. The department then requires the information to know how much each depositor earns from all accounts, Mr Pinsai said.
