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NEWS UPDATES Asean Affairs                    1 October  2011   

Thai corporate cuts may cut tax base

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The Thai government may not be able to increase its tax base if Board of Investment incentives are scrapped or scaled back, as most companies that pay taxes receive BoI privileges, the agency warns.

"I think the BoI in fact gives a helping hand in providing a tax base from which the government can collect," said deputy secretary-general Songsak Limbanyen.

Even though the BoI waives corporate income tax for eight years, most companies do not receive full privileges since they do not turn a profit during the initial investment phase, he said. Therefore, the tax incentives are still beneficial.
The BoI is now adjusting its strategy by scrapping privileges for some existing sectors while providing new privileges to other higher-potential sectors.

It is also studying an act to promote Thai investment abroad with details expected this month.
The agency provides basic information about investment abroad and stages promotional roadshows but has no other forms of assistance despite requests to do so by Thai investors.

Finance Minister Thirachai Phuvanatnaranubala said this week that tax system review would include BoI privileges.
The Yingluck Shinawatra government plans to cut the corporate tax rate, now at 30 percent, to 23 percent next year and 20 percent in 2013.

"Many other countries offer fewer incentives to encourage investment and limit benefits only to industries deemed critical or beneficial to their economies," said Mr. Thirachai.

The BoI offers benefits to investors such as special corporate tax rates, waivers or deductions on duties for imported materials, and special deductions on utility expenses.

Tanit Sorat, a vice-chairman of the Federation of Thai Industries, agreed that reducing corporate income tax rates would do more harm than good to both the government and businesses.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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