Finance Ministry seeks EC, Council of State approval for online gold tax
Finance Ministry is weighing a levy aimed at fast buy-sell cycles, designed to lift trading costs for big speculators and reduce short-term inflows into baht.
- Thailand's Finance Ministry is proposing a special business tax on online gold trading to curb speculation and reduce the baht's volatility.
- The ministry is seeking legal approval from the Election Commission and the Council of State, as the country is currently under a caretaker government.
- The tax is designed to target large-scale, short-term speculators on online platforms and will not affect small retail traders or physical gold purchases.
- This proposal is a response to a surge in online gold trading, with daily volumes now exceeding the turnover of the Thai stock market.
Thailand’s Finance Ministry is moving forward with a proposal to levy a special business tax on speculative gold trading conducted through online platforms, as part of efforts to address the baht’s strength and volatility, a source at the ministry said.
Officials are preparing to submit the plan to the Office of the Council of State and the Election Commission (EC) for urgent legal scrutiny, including whether the tax can be introduced while the country is under a caretaker government.
The proposal would normally require Cabinet approval before implementation.
Caretaker limits, but baht seen as urgent
A ministry source said caretaker administrations are generally expected to avoid launching policies or economic measures that could bind the next government.
However, the baht’s movements are viewed as an urgent matter because of the direct impact on exporters and the broader economy.
The source argued that gold trading has become “too free” in recent years, and that applying a special business tax could cool speculative activity and help reduce currency pressures.
Legal clarity from the Council of State and the EC is therefore being sought before proceeding.
Online gold trading surges
The push for a tax has gained momentum as online gold trading volumes have risen sharply.
The source cited the average daily trading value of about THB65 billion, exceeding the average daily turnover on the Stock Exchange of Thailand of just over THB40 billion.
At times, online gold trading has reportedly peaked at around THB260 billion per day.
Officials believe short-term gold speculation can contribute to baht volatility because transactions may involve selling US$ to buy baht, adding to currency flows that are not always aligned with underlying economic fundamentals.
Targeting big, short-term speculators
Under an initial concept, the tax would focus on gold sales via online platforms where trading cycles are rapid, effectively short-term speculation.
One option under review is to levy the tax based on the number of transactions, which officials believe would raise the cost of frequent trading, reduce volumes and help support baht stability.
The Finance Ministry has insisted the measure would not hit small retail traders, traditional jewellery purchases at gold shops, or the gems and jewellery business.
Instead, it would target large investors carrying out trades worth hundreds of millions to billions of baht, potentially alongside time-based conditions, such as imposing the tax when assets are bought and sold within a short window.
Tax rate still undecided, with 3% cap as benchmark
Officials have yet to settle on a specific rate for online gold transactions.
As a reference point, Thailand’s special business tax is capped at no more than 3% in certain areas, including interest-related transactions, bank fees and the sale of property within the first five years.
Life insurance and pawn businesses are taxed at 2.5%.
Under existing rules, once a special business tax is applied, operators must also pay an additional local tax surcharge of 10% of the tax due for each transaction.
