Finance Ministry prepares tax adjustments to lure FDI
The Finance Ministry is preparing to adjust the tax structure to incentivise foreign investors in preparation for a full reopening of the economy.
One of the planned measures to stimulate the economy is adjusting the tax structure as a short-term boost for individuals and the private sector, while a long-term plan is to support investment by private businesses, said Finance Minister Arkhom Termpittayapaisith.
He did not elaborate on the details of the planned measures.
"If the country fully opens, we are ready to attract foreign investors to invest in Thailand to stimulate the economy," Mr Arkhom said. "We have to prepare [these measures] during this outbreak because we will then be able to continue propelling the economic recovery once the situation is over."
The government offers tax privileges for foreign direct investment through the Board of Investment (BoI). But the tax restructuring plan that the Finance Ministry is preparing is aimed at supporting each business sector, Mr Arkhom said.
Since the BoI's tax privileges are a general measure, the planned restructuring is focused on a targeted area and tax deduction incentives will be increased compared with the existing incentives, he said.
Regarding the declared state of emergency, he said the cabinet has discussed the overall impact and the emergency decree was issued to provide confidence for every party to ensure that street protests will be held in accordance with the law.
The government banned gatherings of five or more people and the publication of news or online messages that could harm national security early on Thursday under an emergency decree to end Bangkok street protests.
This did not stop a large crowd of protesters from rallying at Ratchaprasong intersection on Thursday, as they demanded the resignation of Prime Minister Prayut Chan-o-cha.
The protests have been ongoing for three months. On Wednesday, protesters set up camp outside Government House to demand that Gen Prayut step down.
The government said the emergency action was taken after demonstrators obstructed a royal motorcade.
Mr Arkhom called it a good sign that large commercial banks have begun raising funds through perpetual bonds, as such a move is in preparation for future investment, with the current cost of funding still low.
Bangkok Bank issued additional tier-one capital (AT1) bonds worth US$750 million (23.4 billion baht) last month. The perpetual bond was offered in the overseas market with a coupon rate of 5%.
In addition, Kasikornbank recently issued AT1 subordinated notes worth $500 million, with a fixed distribution rate of 5.275%, intended to support the bank's future expansion plan.