SET pressing for capital market tax amendments, new chairman says

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INTERVIEW
SET pressing for capital market tax amendments, new chairman says
Erich Parpart
The Nation


Sathit

BANGKOK: -- The Stock Exchange of Thailand has proposed revisions in the capital market's tax structure and regulations as part of a long-term development plan and preparation for the Asean Economic Community.

In an exclusive interview with The Nation, Sathit Limpongpan, the new chairman of the SET, said changes in the stock market's tax structure and improved cooperation within the Asean Exchanges were part of the market's long-term development strategy.

The Asean Exchanges comprise seven stock markets from six countries: the SET, Bursa Malaysia (BM), the Singapore Exchange (SGX), the Hanoi Stock Exchange (HNX), the Hochiminh Stock Exchange (HOSE), the Indonesia Stock Exchange (IDX), and the Philippine Stock Exchange (PSE).

Sathit said he believed that the corporate tax, which has been lowered from 35 per cent to 20 per cent, was at an adequate level but some changes were needed in the M&A (mergers and acquisitions) tax structure. He said the current tax structure was not supportive of corporates seeking to merge and there were details within the regulations that needed clarification. This would reduce the temptation for illegal or "off the books" mergers.

"I completely agree that the M&A tax structure should be revised, since it would lower tax costs for corporates that decide to merge, and it could provide greater transparency."

He said the SET had filed proposals for amendments in the tax structure to the Finance Ministry that were currently under review.

The SET has also encouraged Thai listed companies to raise funds abroad, while proposing changes in capital-market regulations to allow foreign companies to raise capital directly in the exchange in order to improve the market's connections with the CLMV countries (Cambodia, Laos, Myanmar and Vietnam).

The SET has already established a strong connection with SGX and BM through the Asean Linkage project. Sathit said it was connected with the bourses in Cambodia, Laos and Vietnam (currently Myanmar does not have stock market) through the sharing of information on the market's system and corporate governance. He said this was a good start in terms of collaboration but there was still room for improvement.

"Since we already have a good connection thorough data sharing, the next step is to encourage listed companies in Thailand to hold shares with the local companies in those countries and to allow their local businesses to raise capital in our market."

Sathit said that not only would Thai companies benefit from venturing abroad through market expansion, businesses in Cambodia, Laos and Vietnam would also benefit from the support of Thai listed companies in financial consultation and their preparations for listing in their own countries.

He said the SET had begun to persuade Thai listed companies with experience in investing abroad to pay more attention to the CLMV countries to help them improve their markets. The goal is that one day, Thai holding companies that are raising funds to support their main operations abroad (such as CK Power) will come back to invest in the Thai stock market.

In its effort to encourage foreign companies to raise capital in the SET, Sathit said it had suggested to the Securities and Exchange Commission that it change the regulations to allow foreign firms to list directly in the SET. The SEC approved this in March but it will not become effective until the commission announces it officially.


-- The Nation 2014-06-02

[Dogmatix]

The headline made it is sound important but it is a boring speech about nothing much.

[Chris Lawrence]

While we are on companies; Directors normally recieve a remuneration for their time on the board.

Now wasn't there a Prime Minister who had a cooking show that was dismissed for being paid for this cooking show?

So how does it work now with the Armed service boys on Thai Company Boards and running the country?

[worgeordie]

What a good idea,lower the taxes for Corporations and Multinationals,

make sure they pay less than the working man.

Too many loop holes now ,so some are hardly paying any tax at all,

in relation to the profits they are making.

regards worgeordie

[SheungWan]

The headline made it is sound important but it is a boring speech about nothing much.

Actually it is a useful speech about something quite important. It puts down the mood music for future development of financial markets in ASEAN. It will be interesting to see to what extent the new Thai regime is able to focus on such matters over the next 12 months and if they have the opportunity to do so.

[SheungWan]

What a good idea,lower the taxes for Corporations and Multinationals,

make sure they pay less than the working man.

Too many loop holes now ,so some are hardly paying any tax at all,

in relation to the profits they are making.

regards worgeordie

FDI and capital movement will consider tax rates when making investment decisions. Raising or holding on to uncompetitive rates may result in lower employment.

[DividendGuy]

If he wanted to say something of interest or worthwhile, he should have talked about dropping the 10% tax on dividend stocks. I believe there are two other countries in Asean who don't charge a tax. I know that Singapore is one and I forgot who the other Aseann country member is, but the point being; if you really want to help the stock markets in the Asean group stop or lower the tax and it will increase their business more than the other drivel he is spouting.

[SheungWan]

If he wanted to say something of interest or worthwhile, he should have talked about dropping the 10% tax on dividend stocks. I believe there are two other countries in Asean who don't charge a tax. I know that Singapore is one and I forgot who the other Aseann country member is, but the point being; if you really want to help the stock markets in the Asean group stop or lower the tax and it will increase their business more than the other drivel he is spouting.

Don't foreigners get the 10% rebated?

[DividendGuy]

No, the dividends for foreigners (all shares for foreigners who want to receive dividends have to be NVDR shares ) are deducted before being sent out to recipient share owners. There was talk before that when Thailand joined this new Asean union, they might follow Singapore's lead and discontinue the 10% dividend tax, but it seems it isn't going to happen because no ones making a fuss or complaining to the SET except me.