Return of LTFs a boon for bourse
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Return of LTFs a boon for bourse

Finance Minister Pichai Chunhavajira says reintroducing long-term equity funds (LTFs) will help lift the Stock Exchange of Thailand's (SET) market capitalisation.

According to Mr Pichai, guidelines for reviving LTFs have already been proposed to the Revenue Department for consideration.

The department is to evaluate the feasibility of reinstating tax incentives for investments in LTFs, including a required holding period for units in order to qualify for tax benefits.

He said he believed a revival of LTFs would help increase the SET's market capitalisation.

In the past, investments in LTFs for tax deductions reached 300-400 billion baht, indicating their high level of popularity. At that time, purchasers were not required to hold on to the LTFs for a long period of time.

The Revenue Department went on to issue an announcement to cancel the tax benefits for LTF investments, which allowed the purchase value of LTF units to be deducted from each investor's personal income tax. This benefit ended on Dec 31, 2019.

Following the cancellation of the tax benefits applying to LTFs, new tax incentives for long-term savings investments were introduced called the Super Savings Fund (SSF). These came into effect in 2020.

Investors are able to purchase SSF units up to a level equivalent to 30% of their assessable income, but not exceeding 200,000 baht in total.

When combined with investments in other retirement funds, the total value must not exceed 500,000 baht. In addition, the investment units must be held for a period of at least 10 years.

Previously, the conditions for LTF investments allowed people to purchase LTF units equivalent to 15% of their assessable income, and when combined with investments in other retirement funds, the total could not exceed 500,000 baht in total.

The holding period for LTF units was initially set at five calendar years and later extended to seven calendar years.

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