Determinants of Effective Tax Rate in Thailand - Research Proposal Example

Just about a year ago the price of international crude oil was about $130 per barrel, but things have come to such a pass now that the oil exporting countries headed by OPEC is worried about the falling prices. These days the prices have come down to about $30 per barrel. This implies better bargains for oil importing nations. Therefore the tax rates would’ve been higher during the period when crude oil prices were high, but there is strong possibility that the tax rates will be comparatively lower if the oil prices are low.

This is just one situation explaining the manner in which the tax rates are determined. There are scores of other determinants which help in shaping the fiscal plan of a country. In addition the procedure for calculation of taxes by the government bodies and corporate sector also depends upon a number of factors. This raises our curiosity about the manner in which the tax regime functions. This research study is therefore being taken up to understand the intricacies regarding the determinants of effective tax rates in a developing country like Thailand.

The taxes in general are of many types collected in direct or indirect manner. But, in this study an emphasis will be laid on finding out the corporate tax structure in particular. In Thailand taxes in general are divided in two broad categories namely direct tax and indirect taxes. Two key components of direct taxes are the personal income tax and corporate tax. On the other hand taxes like excise taxes, stamp duty and value added taxes (VAT) are known as indirect taxes. The modus operandi for calculating these taxes depends upon the revenue generation mechanism being set in place in the country and the level of competition within the industry.

The revenue department of Thailand is entrusted with the task of taxation. Main responsibilities assigned to the revenue department are1; Led by the mortgage crisis in US, a crisis like situation is emerging in almost all parts of the world.