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NEWS UPDATES Asean Affairs  14 October 2010

Thai firms welcome Green tax

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Businesses are welcoming a new green tax even though it could increase their production costs, saying it is a good way to combat pollution.

Pornsil Patchrintanakul, the deputy secretary-general of the Thai Chamber of Commerce, praised the idea but said the government should begin with a voluntary scheme for two years to give business operators time to adjust.

The cabinet on Tuesday approved a draft law that would establish a new environment tax for polluting industries, products and services.

The law, which will now go to the Council of State for review before submission to Parliament, is a framework that must be complemented by other organic laws detailing what taxes will be charged for what types of industries and products.

"Making a green tax effective immediately may create confusion among business operators," said Mr. Pornsil.

He also proposed a conservation fund to finance future environmental projects such as public incinerators or waste management.

Consumers should have to take responsibility for the pollution they create too, added Mr Pornsil. "This will make Thais more prudent in consuming some products such as oil, electricity or steel," Mr Pornsil said.

Payungsak Chartsutthipol, chairman of the Federation of Thai Industries, said big businesses were not the only polluters, and tax rates should be fair to all parties.

"For instance, the Chao Phraya River is being polluted by many shops and restaurants. What kind of measures do we need to prevent this? To make it fair, if the standard rate [of emissions] is 100, companies that emit 50% of the standard rate should be charged only half the amount of taxes."

Businesses are also concerned that consumers may be not ready to pay higher bills resulting from a green tax.

The Finance Ministry insists the green tax should not have a major impact on industrial competitiveness as tax rates would be similar to those in other countries in the region. A ministry official said authorities would hold talks with the private sector before finalising tax rates.


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