Waive dividend tax, SEC urges Finance Ministry

Secretary-general Vorapol Sokatiyanurak said yesterday that the SEC had told the Finance Ministry that the tax-collection system is duplicated. Companies have to pay corporate taxes, but investors are also liable for tax on dividends paid by the companies.

In addition, Thailand is preparing for the Asian Economic Community (AEC), in which there will be freer flow of trade, investment and capital. Meanwhile, some rivals such as Hong Kong and Singapore have no dividend tax. Therefore, Thailand should enhance its competitive edge. Waiving dividend tax would also help promote dual listings, he said.

"We have informally discussed this with the Revenue Department after proposing the dividend-tax waiver in November. This is good timing in response to the coming of the AEC, and the government working towards adjusting the tax structure," Vorapol said.

He said the SEC was amending the rules and regulations on bills of exchange issued by commercial banks after they had raised a vast number of deposits in the form of B/Es, resulting in too many individual investors getting involved. The SEC determined that B/E issuance to individual investors should be restricted clearly. Therefore, as of July 1, the minimum investment by individuals in B/Es will be set at Bt10 million.

"It is believed that this will not have an impact on commercial banks’ operations," Vorapol said.

He said mergers and acquisitions in the securities sector were expected to continue this year, making securities houses stronger. Moreover, competition in the business would focus on the quality of services, as competition on price alone would lead to hardship in the sector.