Tax breaks vowed for flood victims

Finance Minister Thirachai Phuvanatnaranubala said yesterday that he would submit a package of tax-relief measures for flood victims to Cabinet in the next week or two. Among the measures, which are aimed at both businesses and individuals, is a tax allowance for depreciation of machine tools of up to 125 per cent of its value (compared with the normal allowance of 100 per cent). 

Firms that buy new machine tools to replace those damaged in the floods are eligible. Households qualify for tax deductions of up to Bt100,000 each on home repairs, and of up to Bt30,000 on auto repairs, Thirachai said. Flood victims must present bills for home and car repairs to the Revenue Department, he said.

Thirachai is also working with the Bank of Thailand on a plan to offer soft loans to flood victims via banks. When banks’ liquidity runs down after providing loans to firms and individual clients, the government would issue an emergency decree to allow the central bank to offer soft loans. The BOT is expected to charge interest of only 0.01 per cent from banks, which will be required to put in matching funds and re-lend money to flood victims.

Speaking to villagers in Chiang Mai province, Thirachai yesterday said the government would in February start to inject fresh money into village funds. The Pheu Thai Party promised during the election campaign to give more than Bt1 million each to 80,000 village and urban community funds. The minister urged villagers to save their own money as well, and put it into the funds. Villages should also develop their welfare systems, he said, and not simply rely on borrowing and lending money.

Natee Khlibtong, chief executive officer and secretary-general of the National Village & Urban Community Office, said fresh funds of about Bt22 billion would be allocated to village funds from February to September next year. 

More would be allocated after September, depending on the readiness of each village to manage larger amounts of money. Some villages will receive all Bt1 million up front, while others will get Bt500,000 first and the other half later, he said.