The government is considering using tax incentives to support the growth of startups, says Finance Minister Arkhom Termpittayapaisith.
He said the measure could be either an income tax reduction or an income tax exemption for Thai and foreign venture capital funds that invest in startups. The Revenue Department is working out the details of the plan.
The government introduced new tax incentives and measures this year to promote local businesses and ensure fair treatment in the tax system, as well as to boost the country's revenue.
One new tax introduced this year is the e-service tax, which became effective from September.
This law stipulates foreign electronic service providers and electronic platforms that receive income of more than 1.8 million baht per year from providing electronic services to non-VAT (value-added tax) registered customers in the country are obliged to register for VAT, file VAT returns and pay VAT by calculating output tax.
More than 100 online platform operators have already registered to pay VAT in Thailand.
Thailand's enforcement of the e-service tax law follows in the footsteps of more than 60 countries around the globe collecting VAT from foreign e-service operators earning income in their territories.
A ministry source who requested anonymity said Thailand is undertaking tax system reform to increase revenue.
The government has spent more recently to mitigate the impact of the prolonged pandemic and kept the VAT rate at 7% for another two years, instead of the ceiling rate of 10%.
The administration also introduced two emergency loan decrees to allow it to borrow 1.5 trillion baht to fight the pandemic lull and inflate the flagging economy.
In related news, the government missed its revenue collection target. In fiscal 2021, which ended in September, it collected net revenue of 2.37 trillion baht, less than the target by 307 billion baht. The figure is 0.7% lower than the amount for the same period last year.