Finance Minister Pichai Chunhavajira has pledged to pursue comprehensive tax reform to strengthen the country's competitiveness and advance the adoption of digital currency in Thailand by the end of this year.
Speaking at a seminar organised by the Marketing Association of Thailand on Wednesday, Mr Pichai said the ministry's strategy is to foster business partnerships by creating incentives and implementing attractive measures.
He stressed the entire tax system needs to be reviewed to enhance competitiveness, as the highly mobile business environment demands attractive measures.
Mr Pichai highlighted the importance of creating an environment for sustainable business growth, supported by access to finance.
He said he is encouraging both private and public financial institutions to provide loans, especially to small entrepreneurs.
The government is committed to supporting infrastructure development by welcoming private investment because of limited state budget resources, said Mr Pichai. This includes raising funds through infrastructure funds, leveraging future cash flows over the next 30 years for current use.
However, he insisted government spending must adhere to fiscal and monetary discipline, maintaining an appropriate and acceptable deficit level, while ensuring public debt remains manageable or can be reduced in the near future.
DIGITAL CURRENCY PILOT TEST
Mr Pichai questioned why Thailand should not embrace digital currency, which is being exchanged globally and has strong demand.
He said there are 21 million digital coins in circulation, estimated to be worth US$2 trillion, but fewer than 10 million of the coins are actively traded.
This indicates more than half of the codes have likely been forgotten, leaving about $1 trillion in liquidity available for exchange, said Mr Pichai.
With growing demand and ongoing geopolitical issues worldwide, he said people are increasingly seeking alternatives to conventional currencies.
As Thailand is not fully prepared for digital currency at the moment, Mr Pichai said the country is trying to create a platform to identify potential users and establish a market where they can exchange and engage.
For example, if tourists come to Thailand, they could register their coins on a local platform that ensures verification or allows for know your customer protocols. When making purchases, they could pay using coins through an exchange house of their choice, he said.
Buyers and sellers would not know what kind of money they are receiving, but those coins would be transferred into the app and could then be converted into baht via the clearing houses, said Mr Pichai.
"For instance, someone fleeing the war in Ukraine or Russia comes to Thailand and wants to buy a house worth 50 million baht. They would likely find it difficult to raise that amount of money," he said.
"If they can use digital assets, the purchase would be much easier. We need to promote understanding of such structures as part of both a digital platform and the capital market. A digital platform can better reach small investors."
TURNING POINT
Mr Pichai said this year marks a turning point for the Thai economy.
Over the past decade, economic growth has been paltry, with an average real growth rate of less than 2%, he said.
The economy is expected to grow by 2.7-2.8% in 2024, which represents a significant positive shift.
"However, some organisations project growth of less than 3% this year, including the International Monetary Fund," said Mr Pichai.
"I believe we can achieve 3% growth this year. There are positive signals from consumer confidence and private sector consumption, which grew by 5.1% in the third quarter of last year, while investments through the Board of Investment totalled 700 billion baht in the first nine months of 2024."
He said the government is pushing infrastructure investments to enhance competitiveness and reduce logistics costs, such as double-track railway projects spanning more than 2,000 kilometres and the construction of high-speed railways, starting with the Bangkok-Nong Khai route.
In terms of tourism, Thailand welcomed 35-36 million foreign tourists in 2024, with the number expected to rise to 39.8 million this year, said Mr Pichai.
While geopolitical challenges pose risks to the country's economy, he said they also present an opportunity for Thailand to benefit from the relocation of investment, especially in technology, which is an upstream industry.
However, capitalising on relocation depends on the country's ability to develop the midstream and downstream industries to support it, said Mr Pichai.
The electric vehicle (EV) industry has investors from several countries, not only China, establishing production bases in the country as the business offers potential, he said.
If the development of EV manufacturing can progress to reach its full potential without any interruptions, Thailand can likely become the production hub for EVs in this region, said Mr Pichai.