Thailand passes first inheritance tax to raise revenue in lackluster economy

BANGKOK (Reuters) - Thailand’s military government has passed the country’s first inheritance tax bill, as part of tax reforms to broaden the tax base and boost revenue in a lackluster economy.

The bill, approved by the National Legislative Assembly late on Friday, will require inheritors of assets worth more than 100 million baht ($3 million) to pay tax above that threshold - at 5 percent for descendants and 10 percent for others.

That compares with a previously planned threshold of 50 million baht and a tax rate of 10 percent. The bill will be effective 180 days after it is announced in the Royal Gazette.

Finance Minister Sommai Phasee said last week with a tax rate of 5 percent, the government expected to collect about 3 billion baht per year.

The inheritance tax is among the overall tax reforms, which Prime Minister General Prayuth Chan-ocha previously said would terminate benefits that favor the rich.

Prayuth led an military coup in May last year to end months of destabilizing political unrest that brought the economy to the brink of recession.

Thailand downgraded its growth forecasts last Monday by 0.5 percentage points to 3.0 to 4.0 percent for the year. Prayuth said on Friday his government would “try its best” to help the economy.

Prayuth also said a general election will take place in the Southeast Asian country in April or May 2016 - but could be delayed by three months if a referendum on the constitution takes place.

Reporting by Kitiphong Thaichareon and Aukkarapon Niyomyat; Writing by Orathai Sriring; Editing by Michael Perry