Thai Cabinet To Discuss Assistance Measures For Smaller Industries

[webfact]

Cabinet to discuss assistance measures for smaller industries

By Digital Media

BANGKOK, Jan 5 – A “relief package” to help smaller enterprises impacted by the nationwide minimum wage hike to Bt300 will be tabled to the cabinet on Tuesday, according to Labour Minister Phadermchai Sasomsub.

He said the proposed measures which were wrapped up by economic-related ministries – finance, labour, commerce and industry – include a reduction of the withholding tax from 3 percent to 2 percent for small- and medium-sized enterprises (SMEs) and allocation of budget to the Skill Development Department to set up “mobile clinics” to train unemployed or unskilled workers for local industries.

The lower withholding tax will cost the government Bt20 billion, he said, adding that the already-announced reduction of corporation income tax to 20 percent will help boost entrepreneurs’ revenue. The state currently earns Bt60-70 billion from the collection of withholding tax each year.

Other measures include a reduction of fees collected from provincial hotels and resorts from Bt80 per room to Bt40 per room, additional budget for state agencies to hold seminars at provincial venues to spur the economy at tourist attractions, and the Commerce Ministry’s activation of its mobile units to sell goods at cheaper prices to people especially workers at factories.

He admitted that the minimum wage increase will force more businesses to close down, but boosts workers’ purchasing power.

Mr Phadermchai said the closure of Veena Garment which resulted in 287 workers losing their jobs was a consequence of the European crisis because the company mainly exported underwear garments to Europe.

Export order had been exhausted since 2010 and it was unrelated to the minimum wage increase, he said. (MCOT online news)

-- TNA 2013-01-05

[ChrisY1]

Looks as though it's starting to go pear shaped, and only 5 days into the scheme.

Should be interesting if there are in fact job losses in serious numbers as some seem to predict.

[mic6ard]

"He admitted that the minimum wage increase will force more businesses to close down, but boosts workers’ purchasing power."

Does this make sense to anyone? How the heck can their spending power improve if they are out of jobs????

Edited January 5, 2013 by mic6ard

[fareastguy]

More Thai logic !!

[waza]

and the tax revenue base continues to shrink.

[rubl]

include a reduction of the withholding tax from 3 percent to 2 percent for small- and medium-sized enterprises (SMEs)

The lower withholding tax will cost the government Bt20 billion, he said, adding that the already-announced reduction of corporation income tax to 20 percent will help boost entrepreneurs’ revenue. The state currently earns Bt60-70 billion from the collection of withholding tax each year.

Do SME's pay Corporate Tax? If yes, how much did SME's profit from the reduction in Corporate Tax in September 2011? The Corp. tax collection went down from 72-86 billion(30%) to 60-70 billion (23%), but did that effect SME's?

[473geo]

Seem like a fair measure in that those who pay tax gain the benefit

[mic6ard]

most SME do pay tax, however the 7% cut barely make any differences when you add in the increase in utilities and material costs.

Also to make that 7% matter, your SME would have to be making quite a bit of money.

[whybother]

A “relief package” to help smaller enterprises impacted by the nationwide minimum wage hike to Bt300 will be tabled to the cabinet on Tuesday, according to Labour Minister Phadermchai Sasomsub.

Finance Minister Kittiratt Na-Ranong yesterday ruled out the idea of setting up a fund to compensate employers in 70 provinces for the added cost of raising the daily minimum wage to Bt300.

I think the ministers should talk to each other.