Border town prices pose local hurdle

Border town prices pose local hurdle

Fear of exploitation of cheaper goods

A barge docked at Mukdahan, one of 10 provinces tapped for a special economic zone. The government's plan to promote border towns could hurt small operators.  PATTARAPONG CHATPATTARASILL
A barge docked at Mukdahan, one of 10 provinces tapped for a special economic zone. The government's plan to promote border towns could hurt small operators.  PATTARAPONG CHATPATTARASILL

The government's plan to establish border trade towns, and grant the areas special taxes, could take a toll on local small and medium-sized enterprises (SMEs) and One Tambon One Product (Otop) operators, says a Finance Ministry senior official, who requested anonymity.

Cheaper prices to be offered at border trade towns could tempt some people to buy foreign premium products over local ones, or to buy products and resell elsewhere for a profit, the source said.

For example, people may purchase foreign liquors over local ones if they can buy them at border trade towns at lower or the same price as domestic liquors, the source said. The same could happen to other products and this could hurt local entrepreneurs, particularly Otop.

The border trade towns are aimed at boosting cross-border transactions.

Finance Minister Apisak Tantivorawong recently said the border locations would be established in provinces that have special economic zones (SEZs). The government planned to set up SEZs in 10 provinces: Tak, Sa Kaeo, Trat, Mukdahan, Songkhla, Chiang Rai, Kanchanaburi, Narathiwat, Nakhon Phanom and Nong Khai.

Mr Apisak also said operators who sell consumer goods and machinery sought by neighbouring countries in border towns could be subject to lower income tax, value-added tax and customs duty, and electronic payment will be the sole channel available for transactions in border trade towns to stem smuggling products for sale in non-border towns.

However, the Fiscal Policy Office (FPO) is conducting a study and seeking measures to prevent smuggling products from border trade towns to non-border trade towns, the source said.

It is likely to set a limitation on purchase quantities, value per person or number of visits to border trade towns per month, the source added.

The possibility of tax exemptions are also is under discussion, the source said.

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