Govt to start taxing stock market sales this year
The Finance Ministry is standing firm on its plan to impose a financial transaction tax on individual stock investors this year after seeing growth in the local market.
Finance Minister Arkhom Termpittayapaisith on Monday insisted the ministry will go ahead with its tax collection plan, saying this year is the right time to execute it.
The Thai bourse has witnessed growth after being spared the adverse domestic economic impacts of the Covid-19 pandemic, he said.
"This year will see a financial transaction tax imposed on stock investors after the tax has been waived for more than 30 years," he said.
"The stock market has seen growth, but the government continues to shoulder the [financial] burden."
"[Financial] assistance must be given within a fixed time span," he added, referring to the decision.
Amid the pandemic, volatility in the Thai stock market has been caused by external factors, not domestic ones, he said.
"This is the right time to collect the tax," he said.
It is unclear when exactly the taxation plan will be put into effect.
However, the ministry will inform the Stock Exchange of Thailand (SET) of the tax collection plan in advance, Mr Arkhom said, adding the tax plan is already on the books, and is not a new tax plan.
The ministry has already discussed the matter with the SET and the Federation of Thai Capital Market Organisations, he said.
"Initially, there was some resistance, but they finally came to an understanding," Mr Arkhom said.
He said that ending the tax waiver on share sales from the local bourse should help to expand the country's tax base and pull in additional revenue for national development.
He said the government would gain up to 10 billion baht per year from the move, adding the ministry will propose a ministerial regulation on the collection for cabinet approval.
The plan to tax SET traders has been around for 30 years, but it has always been waived by the government to support market development.
In addition to a 0.1% rate, investors will be subject to a related local tax, which means investors have to pay a total of 0.11% of a share sale.
Krisada Chinavicharana, permanent secretary for the Finance Ministry, previously said he believes the total transaction tax rate of 0.11% would not have a significant negative impact on the market.
The Revenue Department was expected to provide a tax exemption for those with a sales transaction value of 1 million baht a month or less.