The Finance Ministry is poised to seek cabinet approval to allow assets that have economic value to be used as collateral for borrowing.
Business owners will be able to use assets such as machinery or inventory to pledge as collateral for loans while still using such pledged assets in operations if the cabinet approves the draft, said Krisada Chinavicharana, director-general of the Fiscal Policy Office.
Mortgages and pledges are the two current types of secured loans. A mortgage is a loan backed by registered things such as houses, land and cars, and borrowers are not liable to deliver such assets to lenders during the borrowing duration. For pledges, borrowers must hand over the assets used to back the loan.
The draft will accelerate seizure of assets backed for loans and lower the burden for court and loan operation officials.
Approved collateral for loans includes companies; a right of claim; assets used in business operations such as machinery, inventory and raw materials; intellectual property; real estate if borrowers are property developers; and other assets specified by ministerial regulations.
Collateral providers can be individual or juristic persons, but collateral takers are restricted to banks, financial institutions and life and non-life insurers.
In other news, the long-standing tax deductible ceiling for entertainment expenses of 10 million baht will be discussed at the Revenue Department's meeting this week.
Current regulations allow entertainment expenses up to 0.3% of total revenue or sales not exceeding 10 million baht a year to be tax-deductible each accounting year.