A group of mall operators has called on the government for remedy, citing losses of almost 15 billion baht worth of sales revenue during forced closure between March 22 to May 17.
According to a source from the Thai Shopping Centers Association (TSCA) who requested anonymity, the association recently filed a letter with the government to consider aid and remedy measures for mall operators, as such centres were shuttered as part of the government's efforts to curb the spread of Covid-19.
During the closures, most operators waived the rental fees for their tenants while still bearing costs, especially for employees, which is the main expense for mall operators.
In addition, the operators have to implement various measures for the sake of employees safety including work-from-home programmes or installing technology, equipment and cleansing measures to halt the spread of the virus.
"Despite stores being allowed to reopen, only 40-60% of shoppers will visit retail complexes because of social distancing measures. It will take about 6-12 months for shopping sentiment to be back to normal," the source said.
"However, this will also depend on the recovery of businesses that help bolster consumption like tourism and exports."
According to the source, some TSCA members have also expressed concerns that they would no longer absorb expenses if the coronavirus pandemic has a second wave.
In the letter, the association also called on the government to help waive or defer the corporate income tax payment for 2-3 years to allow the operators to have enough time to resuscitate their business.
The group also calls for an exemption from property tax during the shutdown and business rehabilitation period.
TSCA asked the government to return the signboard tax during the shutdown and business rehabilitation period and allow operators to claim double expenses spent to curb the spread of the pandemic as deductions.
As operators could not generate any income or make commercial use of their assets, they proposed the government help waive the rental fee for state-owned land they lease to develop the malls and extend the rental period equivalent to the shutdown period.
The recent meeting of the Thai Retailers Association (TRA), in which top executives from various retail chains attended including Supaluck Umpujh, chairwoman of The Mall Group, Wallaya Chirathivat, deputy chief executive of mall operator Central Pattana Plc, and Vipada Duangratana, deputy chief executive of Big C Supercenter, reached a consensus prediction that Thailand's retail industry would contract by as much as 50% in the second half.
"We hope that freezing hiring is only a last resort," the source said.
Malls excluding department stores and hypermarkets employ 326,000 people.
The source said mall operators have to rely on bank loans to ensure short-term liquidity.
Earlier the TRA filed a petition calling on the government to help revitalise their business in the short term, with proposals including the postponement of corporate income tax payment until the second half of the year and reduction of corporate income tax to a fixed rate of 10% over the next three years.
Moreover, it proposed the government waive property tax and signboard tax for 2020 and 2021 tax years, and reinstate the Shop Chuay Chart tax break measure between June and December this year, with minimum spending worth up to 50,000 baht.