Government asked to expedite regulatory guillotine

Government asked to expedite regulatory guillotine

The government is being urged to step up efforts to reform outdated laws and regulations that hinder business activities and public services within six months to raise Thailand's competitiveness after the pandemic.

Kobsak Pootrakool, senior executive vice-president of Bangkok Bank and chairman of a subcommittee on business regulation reform set up by the premier, said the government needs to expedite reducing unnecessary or obsolete laws and regulations, known as a regulatory guillotine, within six months.

Any delay may affect Thailand's overall competitiveness, especially after the pandemic when frenetic competition is anticipated, said the former minister to the Prime Minister's Office.

"Without serious action on the regulatory guillotine, Thailand will find it difficult to improve its competitiveness and return to GDP growth of 4-5% a year," he said.

"Many countries in Asean such as Indonesia and Vietnam have rapidly amended and upgraded their laws and regulations to facilitate investment and public services."

Mr Kobsak said his subcommittee under the Urgent Law Reform Committee chaired by Borwornsak Uwanno is working on the guidelines for the study by Thailand Development Research Institute (TDRI).

TDRI was hired in 2019 by the Office of the Public Sector Development Commission (OPDC) to study and review laws related to licences and permits to reduce unnecessary or obsolete laws and regulations.

The TDRI study found 85% (1,026) of procedures could be amended or abolished completely.

If government agencies agree, it will save the private sector compliance costs of 134 billion baht per year, or 0.8 percentage points of GDP, according to TDRI.

Of the 1,026 procedures, Mr Kobsak said state agencies have agreed to improve 200-300 without amending any laws.

"If state agencies can improve 300 procedures, both the public and private sector could save about 30 billion baht," he said.

According to the OPDC's report, state agencies making good progress in improving their laws and regulations include the Legal Execution Department, the Revenue Department, the Securities and Exchange Commission and the Bank of Thailand.

Mr Kobsak says a sub-committee has also proposed increasing foreign ownership quotas for condos from 49% to 70-80% and allowing expatriates with payslips to borrow from domestic financial institutions while making a purchase.

Their efforts have resulted in unnecessary costs of almost 2 billion baht a year being excised.

Mr Kobsak said his subcommittee submitted a proposal to the premier to improve laws related to the tourism industry and tourism-related businesses.

The government needs to order state agencies to speed up amending regulations related to hotels, spas, and the massage business to better enable a rapid recovery after the pandemic, he said.

"Mandatory regulations such as asking for licences to operate businesses leads to massive unnecessary expenses every year," said Mr Kobsak. "This is a major hindrance to the development of the tourism industry and Thailand's ambition to become a regional medical hub."

For hotels and massage businesses, investors waste almost 4 billion baht a year asking for the state's permission to operate, he said. This excludes the lengthy time needed for the approval process.

With several construction projects delayed by the Covid-19 outbreak, Mr Kobsak said his subcommittee proposed the government allow building construction permits to be extended automatically for as many as three years, up from one year now.

In a move to stimulate demand for properties after the pandemic, the subcommittee also proposed the government increase foreign ownership quotas for condos from 49% to 70-80%, while allowing expatriates who have salary payslips to borrow from domestic financial institutions to purchase condos.

Another recommendation was the government expand property leasehold rights for foreigners from 30 years to 50 years to attract longer stays in Thailand.

In a related development, the subcommittee also proposed the government revoke an existing requirement for companies promoted by the Board of Investment to hire four Thai nationals for every one foreign expert. He said Thailand desperately needs experts and researchers in the digital, high-tech and innovation fields.

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