Finance Ministry Orders Tax Restructuring to Attract Foreign Investment

The Finance Ministry has ordered the Revenue Department to expedite a tax restructuring ahead of the ASEAN Economic Community formation in 2015.

The ministry hopes the new tax system will attract foreign investment and allow the gross domestic product for this year to grow by 4.5 percent.

Permanent-Secretary of Finance, Areepong Pucha-um, reported that the Revenue Department has been ordered to expedite a tax restructuring in preparation for the formation of the ASEAN Economic Community in 2015.

The department is planning to modernize the collection database and the tax logistics system.

However, it has not been decided whether the new tax structure will reduce the personal income tax rate from 25 percent to 18 percent as in Singapore and Malaysia.

The department is currently looking at all the data, but has reaffirmed that the new tax system must give consideration to the cost of doing business in Thailand compared to other ASEAN member countries.

Areepong hopes the new tax structure will attract foreign investment and allow the country's gross domestic product for this year to grow by 4.5 percent.

Areepong, who is also the executive board chairman of TOT, also talked about the 75 billion baht financial damage incurred to the company by the Advance Info Service's altering of the concession contract, saying the matter has been separated into two issues.

First, the Information and Communication Technology Ministry is currently negotiating with three other major concessionaires about their contracts.

According to the ruling made by the Supreme Court's Criminal Division for Political Office Holders, each of the concession contracts was done incorrectly in accordance to the law.

Second, the TOT is seeking financial compensation from the Advance Info Service.

The issue is expected to be settled by February 26.

-- Tan Network 2011-02-09

You can offer all the tax incentives you like. Until the law is changed for foreign investment to have at least 50/50 share of any business then the current laws will remain flawed..!!

This 49/51 is nonsense!

You can offer all the tax incentives you like. Until the law is changed for foreign investment to have at least 50/50 share of any business then the current laws will remain flawed..!!

This 49/51 is nonsense!

Well said!

How can foreigners compete with locals when locals do not pay any tax at all.

While an idea is noble, being a business owner here i pay tax on everything for everything, while local owners in the same business-pay none.

Whilst the Thai government keeps the current regime of 'B' visa's work permits, company ownership,property ownership,lack of long term political stabilitywhy should any sane businessman invest ANY money or expertise in Thailand. If they want inexpensive labour, researching opportunities in either Laos or Vietnam would seem a better option. Both countries have had the advantage of the influence of a sophisticated western country on their culture,really want to develop, so are not so blinkered in their attitutude, ie. 'Thai way is best, anything else is a "loss of face"' (What a joke that is). Reciprocity (international relations), principle that favours, benefits, or penalties that are granted by one state to the citizens or legal entities of another, should be returned in kind. If the Western nations treated Thai citizens as Thailand treats foreigners, perhaps things might change in the 'land of bribes'.

Second, the TOT is seeking financial compensation from the Advance Info Service.

The issue is expected to be settled by February 26.

Yea right, the only thing that will be settled is both parties agree to continue the legal battle.