Thailand's Tax Incentives Aim to Boost Equity Market Revival

[webfact]

Finance Minister Pichai Chunhavajira. File photo

 

In a strategic move to rejuvenate its struggling stock market, Thailand has rolled out tax incentives specifically designed to attract local investors. This initiative, announced by Finance Minister Pichai Chunhavajira, is a direct response to the market's lacklustre performance this year, driven by substantial foreign capital outflows.

 

At the heart of this initiative is a new scheme dubbed 'ESG X', slated for launch by June. Investors partaking in these funds can avail themselves of a tax allowance up to 300,000 Thai Baht. These ESG X funds have a particular focus: investing in local companies that excel in the environmental, social, and governance sectors.

 

This financial nudge comes at a significant potential cost to the Thai government, with an expected tax revenue loss of approximately 50 billion Baht, as noted by Pornchai Thiraveja, who leads the Fiscal Policy Office.

 

The incentive rollout coincides with a moderate rebound of the SET Index, which saw a 0.9% rise on Tuesday, closing at 1,187.63 points. This increase comes as a relief amidst an overall 15% decline for the year. A combination of sluggish economic growth and disappointing corporate earnings has weighed heavily on market sentiment.

Foreign investors remain cautious, reflected in their withdrawal of 25.7 billion Baht from Thai stocks in 2025 alone. The global tariff war exacerbates market volatility, particularly affecting nations like Thailand, which maintains a trade surplus with the US.

 

Prime Minister Paetongtarn Shinawatra underscores the necessity of stronger collaboration among economic policymakers to sustain national growth.

 

An added aspect of the tax incentives targets investors holding long-term equity funds nearing maturity, valued around 180 billion Baht.

 

To curb potential negative impacts from redemptions, these investors will be offered a tax break up to 500,000 Baht should they switch to ESG X funds. However, they must commit to a five-year investment period within the new fund.

 

This new strategy builds on last year's tax break enhancements and reduced lock-in periods to encourage ESG fund investments.

 

Additionally, the government is evaluating a new legislative decree focusing on irregularities in stock trading and corporate activities. Swift enforcement of such regulations is crucial, says Mr. Pichai, in restoring investor confidence within Thailand's financial markets.

 

Overall, these proactive measures reflect Thailand's commitment to stabilising its financial landscape while fostering sustainable investment practices, reported Bangkok Post.

 

-- 2025-03-12

 

 

[JoePai]

This will suit the 'HiSo Rich' - thank you very much 

[ikke1959]

Chase away the tourists and longstayers, make a policy on the rich and superrich and see how the economy will go down further, while in the meantime the rich fill their pockets further... With outdated laws and a conservative attitude that Thailand has it will no go forward. Open the borders and the labour market, welcome tourists and longstayers, invest in the local people by better wages so they can buy more and give a better education to the kids so they will have a chance to get a better job. But now Thailand will go deeper down as tourist will stay away,,, because of the smart ideas of reintroducing the TM6 ( while Thailand and computers never match), entrance fees of 300 THB, non vaping policy for foreigners as the locals can do it, limited alcohol sales and buying hours, double pricing, double standards... But I am dreaming... The rich and famous of the country and the army will never give up one satang