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

administration when local differences in the level of income and pattern of
economic activity are taken into account.

The information provided should largely “demystify” issues concerning
the personal income tax system including the operation of rules for deduction of
expenses, amounts claimed for different types of allowances and donations and

their impact on taxable income and tax due. The samples provide an open-ended
dataset for examination of the variety of context and behaviours that determine
the impact of the PIT system on people with different levels and sources of
income who may qualify for different levels of expense deduction and claim
different allowances. In this sense the sample provides a view of the tax system
in practice as opposed to the theory enshrined in the tax code and ministerial
regulations.

Weaknesses

Identification of taxpayer records by province together with ‘cleaning’
appears to make the sample less representative at the top end (high-income
taxpayers). This is a common problem for all samples where distribution is
strongly skewed towards the top end (e.g. SES, labour force survey) making it
difficult to provide detailed information for people at the top.

The 0.3% sample is not large enough to give reliable province-level
breakdown for many items as can readily be ascertained by comparing summary
statistics by province with statistics from the full database that accompany the
samples provided by RD.

There are large discrepancies at the national level between mean values
in the full database and mean values in the sample for several PND90 items
including reported income from employment 40(1,2), interest and dividend
income 40(4), income of contractors 40(7), other business income 40(8) as well
as total tax credits. These result in under-estimation of tax due by nearly Baht
18 billion or 28% if the sample mean is scaled up by the sampling ratio
(the national total in the full database for PND90 forms is Baht 63.5 billion as
compared with the scaled-up sample figure of 45.8 billion for the same forms).

Similar discrepancies are found in the province samples for these items.

One other significant issue is the grouping of different types of income
under 40(8) for which amounts of gross income and income after deduction

186 Towards a Fairer Personal Income Tax

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