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The International Journal of the Royal Society of Thailand
Volume XII, 2020

Towards A Fairer Personal Income Tax 1

Francis Cripps and Pasuk Phongpaichit

Abstract
This paper investigates into the income sources of those who could be
considered to be in the top 1 % of Thailand in 2012, using for the first time
randomly selected sample of the data from the personal income tax forms

supplied by the revenue department and other relevant sources. The major
finding is that the Thai personal income tax system covers employment income
in the top taxpayer population adequately, but it grossly underestimates
their personal income from rent and investment, both earned domestically
and abroad. Based on the findings, the paper concludes with suggestions on
improving the personal income tax system.

Keywords: personal income tax, tax reform, income sources of top tax payers.

Introduction

Changes in the share of total income held by the top 1 percent has had a
substantial impact on income distribution in developed countries. In the United
States, the share of the top 1 percent more than doubled from 9 percent in 1976
to 20 percent in 2011; and this has sparked a street protest called the Occupy
Movement, brandishing a political slogan “We are the 99 percent”. In other rich
countries, the trend was similar, giving rise to increased inequality across the
OECD countries, though the scale differed among countries. Some have argued
that this concentration is a result of technological changes increasing the rewards
to skill, but the differences in scale across countries with similar technological
2

1 This article is part of a research project entitled “Is the Thai Personal Income Tax System Fair,”
supported by the Thailand Research Fund. It is adapted from a version presented at the meeting
of the Academy of Moral and Political Science, the Royal Society of Thailand on 15 August,
2018, Bangkok.
2 For a survey, see Katz and Autor, 1999.

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