Foreign Chambers seek Thai tax cut

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Foreign Chambers seek Thai tax cut 
The Nation: 4 Aug 2009
Private sector to press PM for cut in corporate income tax

Prime Minister Abhisit Vejjajiva will be asked to lower corporate income tax in order to attract more foreign direct investment (FDI) and strengthen the country's competitiveness.

The request will be made when he meets the private sector on August 19.

Thai Chamber of Commerce chairman Dusit Nontanakorn yesterday said the Joint Foreign Chambers of Commerce in Thailand (JFCCT) had voiced concern the tax rate was higher than in other countries, including Singapore and Malaysia, at 30 per cent for non-listed companies and 25 per cent for listed firms.

"Supposing we cut the rate by 2 percentage points: government revenue would fall, but more FDI would boost employment and the circulation of money," he said after a meeting of the Joint Private Committee on Commerce, Industry and Banking (JCCIB).

Deputy Finance Minister Pradit Pataraprasit yesterday said his ministry would this month restructure the tax system to facilitate business.

Next week, it will decide whether small and medium-sized exporters should be entitled to tax refunds for material imports, which are currently limited to large exporters.

At the monthly Public-Private Partnership meeting

on August 19, the JFCCT will also propose that 100-per-cent foreign ownership be allowed in companies in the service sector and in residential condominiums.

A proposal for 99-year condo leases for foreigners will also be on the table.

Meanwhile, manufacturers will again press for clarity over industrial projects. The authorities have been reluctant to issue project approvals, as the Industrial Works Department has not yet announced the list of industries with serious impacts on local communities.

"It should announce clearly which industries will be on the list, because investors are concerned about this grey area and are afraid of expanding their investment here,"

said Federation of Thai Industries chairman Santi Vilassakdanont.

The JCCIB will also ask for a cut in the water rate in industrial estates from Bt8 per cubic metre to Bt4.50, in order to lower manufacturing costs.

Another proposal is a cut in excise duty on the production of air-conditioners of 72,000 British thermal units or lower, so that manufacturers may compete with illegal and imported equipment that is not subject to the tax.